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Windbox Pty Ltd v Daguragu Aboriginal Land Trust & Ors (No 3) [2020] NTSC 21 (13 May 2020)

Last Updated: 25 May 2020

CITATION: Windbox Pty Ltd v Daguragu Aboriginal Land Trust & Ors (No 3) [2020] NTSC 21

PARTIES: WINDBOX PTY LTD (ACN 007 419 641)

v

DAGURAGU ABORIGINAL LAND TRUST

and

CENTRAL LAND COUNCIL

and

JACT PASTORAL PTY LTD

and

LESLIE, Zebb Raymond

and

ROWBOTTOM, Kylie Danielle

TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION: SUPREME COURT exercising Territory jurisdiction

FILE NO: 11 of 2018 (21840850)

HEARING DATES: 19 October 2018, 19 November 2018, 21-22 February 2019, 4-8 March 2019,

13-15 March 2019, 4 April 2019, 9 May 2019, 13 June 2019, 22-23 August 2019 and 16 September 2019

JUDGMENT OF: Hiley J

CATCHWORDS:

ABORIGINAL AND TORRES STRAIT ISLANDER PEOPLES – Aboriginal land rights – grazing licence granted by Land Trust pursuant to s 19 Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (ALRA) – direction and satisfaction of relevant Land Council when performing its functions under ss 19 and 23 ALRA (Cth) – indefeasibility of title under s 19(6) ALRA.

REAL PROPERTY – indefeasibility of title under s 19(6) Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) – fraud as an exception.

CORPORATIONS – Statutory duties –Officers and employees – Meaning of “officer” – Duty to act in good faith – Duty not to use position improperly – Duty not to improperly use information – Improper use of former position to obtain advantage in subsequent commercial transactions – Requirement to clearly identify the information said to have been used improperly – ss 9, 181, 182, 183 of the Corporations Act (Cth)

Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) s 4, s 5, s 19, s 22, s 23

Corporations Act 2001 (Cth) s 179, s 181, s 182, s 183

Evidence (National Uniform Legislation) Act 2011 (NT), s 140(2)(c)

Transfer of Land Act 1893 (WA)

Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172, Katsilis v Broken Hill Pty Co Ltd (1977) 52 ALJR 189, applied

Advanced Fuels Technology v Blythe [2018] VSC 286, Australian Securities and Investments Commission (ASIC) v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963; (2007) 160 FCR 35, Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd [2010] NSWSC 233; (2010) 238 FLR 384, CellOS Software Ltd v Huber [2018] FCA 2069, Wilson Parking Australia 1992 Pty Ltd v Rush [2008] FCA 1601, distinguished

Hodgson v Amcor Ltd [2012] VSC 94, APT Technology Pty Ltd v Aladesaye [2014] FCA 966, Ashby v Slipper [2014] FCAFC 15; (2014) 219 FCR 322, ASPL Pty Ltd v Rajakaruna [2019] WASC 269, Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2013] FCA 909; (2013) 310 ALR 165, Australian Securities and Investments Commission v King [2020] HCA 4, Bahr v Nicolay (No.2) [1988] HCA 16; (1988) 164 CLR 604, Bale v Mills (2011) 81 NSWLR 498, Coco v AN Clark (Engineers) Ltd (1968) 1A IPR 587, Commissioner for Corporate Affairs v Bracht [1989] VicRp 72; [1989] VR 821, Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434, Courtenay Polymers v Deang [2005] VSC 318, Ellis v Central Land Council [2018] FCA 35, Ellis v Central Land Council [2019] FCAFC 1, Emeco International Pty Ltd v O’Shea [No 2] [2012] WASC 348, Giannarelli v Wraith (No.2) [1991] HCA 2; (1991) 171 CLR 592, Gondarra v Minister Families, Housing, Community Services and Indigenous Affairs [2014] FCA 25; (2014) 220 FCR 202, Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, Links Golf Tasmania Pty Ltd v Sattler [2012] FCA 634; (2012) 213 FCR 1, Manildra Laboratories v Campbell [2009] NSWSC 987, Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] AC 535, Northern Land Council v Quall [2019] FCAFC 77, R v Toohey; ex parte Meneling Station [1982] HCA 69; (1982) 158 CLR 327, Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 201, Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Secretary, Department of Community Services [1989] FCA 384; (1990) 22 FCR 73, Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87, Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272, Windbox Pty Ltd v Daguragu Aboriginal Land Trust & Ors [2019] NTSC 47, Windbox Pty Ltd v Daguragu Aboriginal Land Trust & Ors [No 2] [2019] NTSC 96, referred to

REPRESENTATION:

Counsel:

Plaintiff: A Harris QC, M Barnett and S Heidenreich

1st & 2nd Defendants: C Young

3rd, 4th & 5th Defendants: A Wyvill SC and H Baddeley

Solicitors:

Plaintiff: Gardiner and Associates / Povey Stirk

1st & 2nd Defendants: Central Land Council

3rd, 4th & 5th Defendants: Ward Keller

Judgment category classification: B

Judgment ID Number: Hil2003

Number of pages: 203

IN THE SUPREME COURT

OF THE NORTHERN TERRITORY

OF AUSTRALIA

AT ALICE SPRINGS

Windbox Pty Ltd v Daguragu Aboriginal Land Trust & Ors (No 3)

[2020] NTSC 21

No. 11 of 2018 (21840850)

BETWEEN:

WINDBOX PTY LTD (ACN 007 419 641)

Plaintiff

AND:

DAGURAGU ABORIGINAL LAND TRUST

First Defendant

AND:

CENTRAL LAND COUNCIL

Second Defendant

AND:

JACT PASTORAL PTY LTD

Third Defendant

AND:

ZEBB RAYMOND LESLIE

Fourth Defendant

AND:

KYLIE DANIELLE ROWBOTTOM

Fifth Defendant

CORAM: HILEY J

REASONS FOR DECISION


(13 May 2020)

Contents

Introduction

[1] The plaintiff, Windbox Pty Ltd (Windbox or the Company), conducted a cattle business on land owned by the Daguragu Aboriginal Land Trust (DALT). Windbox held grazing licences granted by DALT over three areas of land known as McDonald’s Yard, Berta Warta and Northern Paddocks (the Windbox grazing licences). Those licences expired on 7 September 2011, 1 September 2010 and 12 November 2010 respectively. Windbox continued in occupation of that land.
[2] In June 2018, the second defendant (CLC) conducted meetings with people whom it considered to be the relevant traditional aboriginal owners of the relevant land. A fresh grazing licence was issued to Windbox over the Northern Paddocks land and fresh grazing licences were purportedly granted to the third defendant, JACT Pastoral Pty Ltd (JACT PPL), over the McDonald’s Yard and Berta Warta areas (the Land) (the JACT grazing licences). The licences were to commence on 8 October 2018.
[3] On 29 June 2018, CLC wrote to Windbox advising of the outcome of the June meetings and gave Windbox 90 days’ notice to vacate the land. This required Windbox to remove its cattle, approximately 6000 head, by the end of September 2018. Windbox commenced these proceedings on 27 September 2018 and sought urgent relief by way of interlocutory injunction to restrain the CLC from enforcing the notices to vacate. The Court heard that application on 19 October 2018 and following agreement between the parties, made an interlocutory injunction which was to expire on 1 May 2019.[1] The main effect of the interlocutory injunction was to preserve the status quo and allow the plaintiff’s cattle to remain on the land during the wet season. This effectively deprived JACT PPL and its directors and shareholders, the fourth and fifth defendants (collectively referred to as JACT) of their ability to use the land the subject of the JACT grazing licences and to conduct a pastoral business on the Land.
[4] Evidence was adduced mainly by affidavit. Witnesses were called and cross-examined over a period of eight days from 4 – 8 and 13 – 15 March and 4 April 2019. Programming orders were made for the filing and exchange of written submissions. At that stage the main claims on the part of Windbox concerned whether:

Live issues

[5] On 1 May 2019 JACT purported to terminate the JACT grazing licences on the basis that DALT and CLC had failed to provide and permit JACT access to and possession and use of the land from 8 October 2018. Accordingly, Windbox no longer required the permanent injunctive relief originally sought against the defendants.
[6] Windbox settled its claims against DALT and CLC. Windbox, DALT and CLC purported to have Windbox’s claims against DALT and CLC dismissed by consent orders.[7] However, on 23 August 2019 the Court set aside the consent orders at the request of the JACT parties, mainly because of their desire to obtain a judgment on those issues that might be relevant to their entitlement to damages flowing from the making of the interlocutory injunction.[8]
[7] Accordingly, Windbox’s only live claim is that against JACT based upon its allegations of breach of statutory duty by Mr Leslie. However, JACT seeks determination of the other main issues, primarily the validity and effect of the JACT grazing licences.[9] By summons filed on 16 September 2019, Windbox applied for the proceedings brought by it against DALT and CLC to be dismissed. Senior counsel for Windbox confirmed that Windbox no longer advances any positive case in support of paragraphs [53.6] and [53.7] of the FSOC.

Facts

Parties and their roles

[8] DALT is a land trust established and constituted under s 4 of ALRA. It is the proprietor of an estate in fee simple of land in the Northern Territory.[10] It holds the land for the benefit of the traditional Aboriginal owners of the land (the traditional owners).[11] DALT constituted of five members, who were appointed from 27 March 2018. At least three of those members must provide their written authority for DALT to affix its common seal to a document. Like all Land Trusts established under ALRA, DALT could not exercise its functions in relation to its land unless it had a direction to that effect from the relevant Land Council, here the CLC.
[9] Aboriginal communities at Kalkarindji and Daguragu are within the land owned by DALT. Kalkarindji is located about 500km southwest of Katherine. The grazing licence areas known as Northern Paddocks, McDonald’s Yard and Berta Warta are within the land held by DALT.
[10] The Central Land Council is a body corporate established under s 22 of ALRA. It is empowered under ALRA to negotiate interests in Aboriginal land on behalf of the traditional owners of land held by a Land Trust such as DALT.[12] A Land Trust, including DALT, is not permitted to deal with an interest in such land except at the direction of the CLC.[13] The CLC has various statutory functions in relation to the management of Aboriginal land.[14]
[11] DALT granted the three grazing licences to Windbox, each at the direction of the CLC pursuant to s 19(5) of ALRA:
[12] Windbox had been operating a pastoral business grazing, breeding and selling cattle on the land at Northern Paddocks, McDonald’s Yard and Berta Warta. It also operated an abattoir and butcher’s shop in the Kalkarindji township (often referred to as the Kalkarindji Meatworks business).
[13] On 14 May 2009, Mr Raymond Dodd, Mr Robert Vagg and Mr Calvin Chandler purchased Windbox and became directors of Windbox. Mr Chandler retired as a director on 15 December 2009. Thereafter, shareholdings in the Company were held by Mr Dodd (as to 85%) and Mr Vagg (as to 15%). Mr Vagg was purportedly removed as a director on 6 February 2018.[18]
[14] At all material times Mr Dodd was based in Melbourne, Victoria. He did not have first-hand experience in the management of cattle stations. Mr Vagg was based in the Northern Territory until 2016 when he moved to Victoria. Mr Vagg was responsible for the cattle side of Windbox’s business and the running of the Station.
[15] The fourth defendant, Mr Zebb Leslie, grew up on a mixed farming property in western New South Wales. From around 1996 until about 2004 he worked in the Victoria River District. He has been a commercial helicopter pilot since about 2004 and has carried out contract mustering work, mainly on cattle stations in the Northern Territory. He is also a qualified meat inspector. As a result of living and working in the Kalkarindji region since 1996 he established good relationships with Aboriginal people in the area including traditional owners. The fifth defendant, Ms Kylie Rowbottom, grew up in Katherine. She and Mr Leslie have been living together as a couple since around 2000 and have four young children. They have been living and working in the Katherine and Kalkarindji region ever since.
[16] In about November 2009, at the request of Mr Dodd, Mr Leslie began providing services for Windbox in relation to “livestock welfare issues”. On about 23 December 2009 Mr Dodd prepared the following document titled “Letter of Appointment”.[19] The letter stated:

We have pleasure in confirming your appointment as Manager of Kalkaringi.

Your remuneration package is $50,000 plus accommodation (ex Fox’s), meat from Kalkaringi, vegetables and groceries supplied excluding alcohol, and cigarettes.

Please have your Management Company invoice Windbox P/L on the first of every month with 1/12 of your annual remuneration ($4166.66). Please add $2000 on invoice for 1/01/10 (for work completed in November).

You are to prepare a development program to help the stakeholders realize their goal of running a low-cost, sustainable cattle breeding enterprise aimed at the live export market. The Development Plan should be designed to allow for wet season spelling of country and to avoid large concentration of cattle numbers at any one watering point, to avoid land degradation.

Our ultimate goal is the maximum distance we expect cows and calves to walk is three kilometres from their water point, to fully utilize the efficiency of the feed into beef production. Within 6 months we want complete a plan including initially cost and budget for the laying of polypipe out from the bores and installing a 5000 litre tank and two troughs every six kilometres along the pipeline to adequately supply the cattle during the Dry.

With your demonstrated expertise in Helicopter Mustering we acknowledge your commitment to contracting in addition to your management responsibilities at Kalkaringi and we welcome your input into the Development Plan to initiatives you can implement to reduce and manage mustering costs by utilizing our paddock use more effectively.

You are in total charge of the Kalkaringi Property reporting only to the stakeholders and we expect you to implement management systems to report efficiently cattle numbers and the building up of the herd and focusing heavily on fertility, and accepted industry practice or culling all empties, fat dry cows and speyed heifers, all sale bulls and forward steers tailed out to be mustered again next year for the live export market.

We would expect your detailed management plan to address these vital areas in the concentration of improving cattle numbers and focusing on our target market, live export cattle.

We have engaged our accountants, Pearson Partners to prepare a tax planning report and structure for the efficient payments to you of after tax dollars and the utilization of this structure to include your Helicopter mustering contracting integrated with your management income at Kalkaringi.

We would ask you to formally sign an acceptance of these conditions of employment under this letter.

[17] There is no evidence that the letter was ever signed and sent by Mr Dodd. Mr Leslie did not recall having seen it before. However, when the contents of the letter were put to Mr Leslie during cross-examination he did not disagree with any particular parts of it. Its contents were consistent with what he understood his duties to be. He said he was never in total control of the business.
[18] Ms Rowbottom was initially engaged by Windbox as a meat worker. She also worked around the Station doing gardening, cooking and liaising with Windbox’s bookkeeper in Melbourne about the Station books and other office work. She worked without pay until around 2011 or 2012, when Mr Vagg and Mr Dodd agreed to pay her $25,000 per year for continuing to do that work. Mr Leslie also obtained qualifications as a meat inspector. This better enabled him and Ms Rowbottom to organise and operate the Kalkarindji Meatworks.
[19] During 2012, the form of Mr Leslie’s engagement was changed from that of contractor to full-time employee. He was then employed as the Station Manager for Windbox. There appear to have been no relevant changes to his duties and responsibilities.
[20] From time to time Mr Leslie and Ms Rowbottom complained about the terms of their employment and the fact that Windbox should reimburse Mr Leslie for equipment of his that he had brought onto the property and that he had been using on the property for Windbox’s business. Mr Leslie had told Mr Dodd and Mr Vagg that he and Ms Rowbottom wanted to be allocated some shares in Windbox in return for their efforts. On 28 September 2015 Mr Dodd said that Windbox would offer them 10% of the Company on certain terms. These included 2% of Windbox “in recognition of past effort and in compensation for those items you have purchased that are used on Kalkarindji” and “a further 8% at 1% per year over eight years for a total of $520,000 provided that” Mr Leslie achieved a specified weaner rate.[20]
[21] Mr Leslie responded in some detail on 30 September 2015. Amongst other things he repeated that he and Ms Rowbottom had taken a huge pay cut to work for Windbox and were “promised a 10% deal two years” earlier, and could not understand why they were only being offered 2% immediately and would have to wait another eight years for the 10%. He also expressed concern about the condition concerning the weaner rates, and asked about Windbox engaging a governess.[21] Mr Dodd replied on 27 October 2015 rejecting Mr Leslie’s concerns and insisting on the 1% per annum over eight years and the condition concerning weaner rates.[22] Then followed discussions between Mr Leslie and Mr Dodd, which were not successful.[23]

2009 to end of 2017

[22] Clause 19 of each of the three Windbox grazing licences provided that:

If the Licensee (with the Land Trust’s consent express or implied) remains in occupation of the licence Area after the expiration of the Term, the Licensee will hold a monthly licence over the licence Area for a fee equivalent to the licence Fee payable for the period immediately before the Term expired and otherwise on the same terms specified in this agreement.

[23] Following the expiration of the terms of the three Windbox grazing licences in 2010 and 2011, Windbox remained in occupation and continued to conduct its pastoral business. It continued to pay licence fees thereafter, six monthly in advance with an annual CPI uplift.
[24] From about 2009 (i.e. prior to the expiration of the Windbox grazing licences), Windbox and the CLC were in negotiations with respect to the renewal of the three licences. The negotiations were largely conducted through emails and discussions between Windbox’s then solicitor, Mr Graham Cole, and the CLC’s in-house solicitor, Ms Sarah Wilkie. An important part of those negotiations concerned the duration of the fresh or renewed grazing licences.
[25] On 17 August 2016 Mr Vagg and Mr Leslie attended two meetings at the CLC office at Kalkarindji, convened for the purpose of Windbox presenting its proposal to the traditional owners for new grazing licences.[24] The first meeting related to McDonald's Yard and included a number of people who were traditional owners for that area.[25] The second meeting related to Berta Warta and included a number of people who were traditional owners for that area.[26]
[26] Prior to and for the purpose of those meetings Windbox prepared and provided to the CLC a document titled “Kalkaringi Central Land Council Proposal August 2016”.[27] Mr Leslie said, and I accept, that he did not prepare that document or give directions about its the contents. He said that if he did have that kind of involvement with the document, it would have been substantially different.[28] Although some earlier drafts were sent to Mr Vagg and Mr Leslie for their comment, it seems that the document was originally drafted by Mr Dodd with the assistance of Windbox’s then-accountant Mr John Pearson of Pearson Partners, largely based on information contained in a letter sent to CLC on 20 October 2014 where Windbox was proposing “a long term pastoral lease”.[29]
[27] At those meetings, Windbox had proposed that it be granted grazing licences for a term of 10 years, with two options for 10-year extensions. Mr Leslie and Mr Vagg were both present at those meetings. Mr Leslie was requested by Mr Vagg to make a presentation to the traditional owners in support of Windbox’s request for the grants of the licences. Mr Leslie was asked to make the presentation because Mr Vagg had significantly impaired hearing and found it difficult to understand everything that was being said by the traditional owners.
[28] Following the August 2016 meetings and consultations by the CLC with the traditional owners, Ms Wilkie sent Mr Cole an email on 19 October 2016. It was headed: “Daguragu Aboriginal Land Trust – Grazing Licences”. It included the following:[30]

I refer to previous communications on this matter. The outcome of consults with traditional owners (TOs) of Daguragu Aboriginal Land Trust (the Land Trust) is that they would be pleased to enter into a grazing licence with Windbox Pty Ltd (Windbox) over the Berta Warta, McDonald’s Yard and Northern Paddocks on the following essential terms:

Berta Warta

McDonald’s Yard

Northern Paddocks

Seale, Springs and River paddocks: 2,000 head (same)

North Seale paddock: 400 head (same)

Neave Ridge paddock: 1,200 head (same)

* Please note that these proposed license fees are based on advice from a valuation of the licence areas undertaken in February 2015. Given the lapse of time I have applied the June 2016 CPT however for the purpose of the grazing licence these will be updated once the September quarter CPI is published.

[29] The email also explained why the traditional owners would not agree to the term of 10 + 10 + 10 years proposed by Windbox. It also referred to difficulties progressing a request by Windbox for a grazing licence over land owned by the Hooker Creek Aboriginal Land Trust. Ms Wilkie attached a mud map that had been prepared by Mr Leslie and Alastair MacDonald for the purposes of that particular request.
  1. Windbox was not prepared to accept licences on those terms, and never communicated any acceptance of such terms to the CLC. Rather Mr Dodd continued to insist on obtaining terms of 10 years with two 10 year options.[31]
[31] Mr Vagg emailed Mr Cole regarding the slow progress of negotiations on 6 December 2016,[32] 25 April 2017,[33] and 26 July 2017.[34] He also emailed Mr Leslie regarding the slow progress of negotiations on 25 July 2017.[35] Ms Wilkie emailed Mr Cole on 14 December 2016 advising that CLC was revising its standard form grazing licence and that would be “the starting point for this matter” and that: “obviously in the meantime the existing grazing licences for each license area will operate on a holding over basis.”[36]
[32] From early 2017 Mr Vagg complained to Mr Leslie that he thought that Mr Dodd was committing tax fraud as a result of which Mr Vagg was not getting dividends from Windbox. Mr Vagg also told Mr Leslie that he thought it unfair that Mr Leslie and Ms Rowbottom had not yet been given shares in Windbox, or been paid for the equipment that Mr Leslie had brought to the Station and used in running the Station. Mr Vagg said that he would have discussions with Mr Dodd to ensure that Mr Leslie was given some shares. Mr Leslie testified that he was not particularly interested in Mr Vagg’s issues with Mr Dodd, but was more concerned with obtaining shares in Windbox and being reimbursed for his equipment. Mr Leslie was happy for Mr Vagg to assist him to get the shares but was a little wary of what Mr Vagg was telling him because he feared that Mr Vagg might be in cahoots with Mr Dodd or might be simply trying to get Mr Leslie onside in relation to his arguments with Mr Dodd.[37] Mr Vagg began to send Mr Leslie and Ms Rowbottom emails about those matters including correspondence Mr Vagg was having with his accountant Mr Peter Murphy and Mr Dodd.[38]
[33] By email on 26 July 2017, Mr Cole requested Ms Wilkie to arrange a further meeting of traditional owners to consider “an initial term of 10 years with two options for two further terms of eight years each.” Mr Cole’s email added that:[39]

My clients would like to stress to the CLC and the traditional owners that they are extremely keen to invest significant capital in a full range of cattle station improvements but need long-term tenure to support the considerable investment. The type of improvements contemplated would include yards, fencing, all types of water improvements and improved pasture.

[34] Mr Dodd accepted during cross-examination that Mr Vagg may have told him at around this time that if he did not reach a suitable arrangement with Mr Leslie, Mr Leslie might go elsewhere and take his influence with him.[40] On 28 July 2017, Mr Vagg forwarded to Mr Leslie an email exchange between Mr Vagg and his brother regarding Mr Leslie’s and Ms Rowbottom’s status as “important partners” for Windbox.[41]
[35] On 4 August 2017, Ms Wilkie responded to Mr Cole’s email of 26 July 2017 as follows:[42]

The CLC consulted traditional owners last year on two separate occasions to discuss their wishes in relation to the renewal of the three grazing licences known as Northern Paddocks, McDonald’s Yards and Berta Warta. On one occasion your client attended the meeting and spoke directly with the landowners about the offer. There was lengthy and frank discussion between your and my clients about the offer.

After much consideration traditional owners instructed me that they wanted to renew the grazing licences but on the conditions, which I set out in full, in my email to you from 19 October 2016 (see attached).

Your clients request for a longer term with two options to extend of ten years each was expressly rejected by traditional owners. As I advised last year traditional owners were concerned that Windbox’ proposal locked them into an arrangement that would outlive them all. Their primary concern centred around relinquishing a significant degree of control over the course of the future of their land as well as their children losing the opportunity to consider their own agreements over their land in the future as well as general concerns around (as yet) unknown factors that may arise.

I also advised that traditional owners are eager to continue their good relationship with the company and in particular with Zebb Lesley. However they wish to maintain some influence over the future course of the relationship which they feel would be lost if they consented to a longer term.

Your client is now proposing a term of ten years with two options for two further terms of eight years each, which, while shorter in total than that the CLC took to traditional owners in 2016, is still sufficiently long such that I am compelled that the reasons given for rejecting the initial offer apply to the second offer.

Where the CLC has conducted meetings and obtained instructions it is not the practice to re-conduct those meetings where the other party does not agree with traditional owners instructions.

[36] On 16 August 2017 Mr Dodd met with Mr Vagg and Mr Vagg’s accountant, Mr Peter Murphy, at Mr Dodd’s hotel in Melbourne.[43] Discussions included:
[37] Mr Murphy provided a summary of the meeting to Mr Vagg. Mr Vagg provided some additional comments and made some small corrections on 21 and 23 August.[45] Mr Vagg forwarded a copy of those emails to Mr Leslie on 23 August.[46] Later that day Mr Murphy emailed the summary to Mr Dodd, copied to Mr Vagg.[47] Mr Dodd responded on 26 August.[48]
[38] Meanwhile, it seems that shortly after the meeting of 16 August 2017, Mr Vagg had communications with Mr Cole. Mr Cole engaged with Ms Wilkie about the possibility of the parties agreeing to the 5 + 5 year terms set out in Ms Wilkie’s email of 19 October 2016[49] but adding a provision “something along the lines of the following”:

The Licensee may, during the term of this Licence and during any renewed term thereof, request that the Land Trust grant to the Licensee a further term of five years.

The Land Trust undertakes to genuinely consider such request or requests and agrees to take into account the Licensee’s performance of the terms and conditions of this Licence but shall not be bound to grant any further term or terms of this Licence save for the Further Term referred to in Condition?[50]

[39] This suggestion was referred to by counsel for Windbox as the “Vagg amendment.” Because no evidence was led from either Mr Vagg or Mr Cole, I do not know any more about the communications between them concerning that suggestion. I infer that one or both of them came up with the idea. There is no evidence that Mr Dodd was consulted about that suggestion. Nor is there any evidence that he ever agreed to it. Rather, I infer that he never considered that suggestion, even when he sent the emails on 24 and 29 January 2018 concerning instructions he contemplated sending to Mr Cole.[51]
[40] On 3 October 2017 Ms Wilkie emailed Mr Cole advising him that the CLC would be holding meetings with the traditional owners on 11 and 12 October to discuss the grant of the grazing licences on the terms set out in her email of 19 October 2016 adding that she would also put to them the Vagg amendment. Ms Wilkie asked Mr Cole to “advise your client’s response to the terms my client instructed they wanted for each licence area at the 2016 meetings.”[52] The evidence does not reveal what steps if any Mr Cole took to speak to either Mr Dodd or Mr Vagg about this. Nor does it reveal any response to Ms Wilkie’s request.
[41] It seems that Mr Cole was overseas until 25 November. Accordingly, Ms Wilkie cancelled the proposed meetings with the traditional owners and suggested further discussions after Mr Cole returned, with a view to progressing the grazing licences.
[42] Meanwhile, Mr Dodd and Mr Vagg had discussions about their relationship and the future of the business. In an email sent to Mr Dodd on 6 October 2017[53] Mr Vagg stated, inter alia:

I was very pleased that we were able to have an in depth discussion of the very serious matters of contention in a calm and dignified manner. However, I was unsuccessful in convincing you that change was necessary if we were to continue as a working partnership.

But there is nothing to be gained in dwelling on that negative outcome. It seems evident to me that you will give no ground on the issue of an independent accountant for Windbox Pty Ltd. That means in affect that our partnership will not survive. If there was some positive to be gained from that meeting it was our agreement that one partner or the other should agree to sell.

That is probably the reality given that we do not have a lease at this time and as things stand our business would be of little interest to an outside buyer. So lets move on to what would be a positive outcome for all parties.

It is fair to say at this time that Zebb and Kylie are in agreement with us on the matters of contention and the way forward. So here is our proposal for your consideration. There are obvious difficulties for us in funding a buy-out of your shareholdings at this time.

But if you were to offer vendor finance that would be a positive development and would offer some important advantages for you as well. I’ll come back to that later.

If you were to agree to a sale of your shares in the Lease, land, stock and business on terms such as:

1 First negotiate with Zebb and Kylie to sell an 8% share for $65,000 per 1%. This is 12% higher (per 1%) than our full purchase price but significantly higher still when judged against your original investment. (A reasonable price given that they have been promised this opportunity for four years or more without any progress.) Total cost Zebb and Kylie would be $520,000.

With say 3% up front ($195,000) and you offering funding for the balance over five years with capital reduction $65,000 plus interest at 5% payable at the end of each 12 month period.

With the 2% already promised Zebb & Kylie would now have a 10% shareholding. However, these are suggestions only but agreement must be the result of negotiations between you, Zebb and Kylie.

2 With the new partners now holding 10% we would join with them to negotiate the purchase of your remaining equity share. Obviously we would have to reach agreement with you on a fair and reasonable purchase price. So as a potential purchaser let me suggest to you that price should be based on the original purchase price plus say 10%. IE $6,380,000. We now know that the best offer we can get from the TO’s will be a Five plus five year terms with the possibility of extension at some later date but no guarantees. However we would argue that price should be discounted by $350,000, in recognition of dividends denied to the Vagg entity over the past five years by JP’s fictitious cost entries and as you put it ‘the massaging of our accounts’.

...

Such an agreement would allow for a smooth transition to the new ownership with benefits to all parties.

You would obtain a significant capital gain at the end of the loan period. $5,042,500 against an original outlay of $2,554,000. Along the way you would be getting 5% return on your loans. Perhaps double what you might get from a bank.

But most importantly you would get the Windbox Pty Ltd accounts off your books and eliminate the risks therein. Please give this proposal serious consideration and I suggest we meet again to discuss next Thursday 12th at 11am if that is suitable to you.

(underling added by me)

Shortly after that, Mr Vagg forwarded a copy of that email to Mr Leslie.[54]

[43] On 25 October 2017 Mr Vagg sent another email to Mr Dodd.[55] That email raised a number of concerns which Mr Vagg had about the company accounts. They included concerns about unexplained differences in lease payments between 2013 and 2017, the fact that they were now being paid by Windbox to the Kalkarindji Pastoral Unit Trust which Mr Vagg knew nothing about, unexplained understating of cattle sales by approximately $475,550 over the previous three years, and “the bogus claim for costs Water, Pumps and Bores.” Mr Vagg sent Mr Leslie a copy of that email on 27 October.
[44] On 1 November 2017, Mr Vagg emailed Mr Leslie a draft of an email he proposed to send to his accountant Mr Murphy. The draft stated:[56]

Hello Peter, I hope this email finds you well.

As expected there has been no contact from Ray since my last email sent on the 25th October.

So I think we have reached the stage when we must accept the reality of our situation in that Ray will not accept change unless forced to do so.

If his position is allowed to stand then there is no future for us in this partnership. It follows that would apply equally to Zeb and Kylie especially if they were to become shareholders. Ray and John would continue with their tax scheme/scam unchallenged and deny any profit and dividend flow to the minority shareholders. We would be obliged to accept an undervalue buyout from Ray after 8 years investment and not one dollar in return. Zeb and Kylie would [be] forced to pack up and leave having wasted six years of their lives working exceptionally long hours developing the herd and property. We cannot allow this to happen. It’s time for us to put directly to Ray the reality of his position. If he does not agree to the changes we seek he will face serious consequences.

And we need to put this reality to him as soon as possible. I’m certain he and John are working urgently to try and cover up or remove damaging evidence from the records of our accounts.

So let’s look at what changes we must seek.

1 If the partnership is to continue it must have an independent accountant who will provide accuracy and transparency to our company accounts. We must have a shareholders agreement that enshrines the rights of minority shareholders on matters such as profit distributions, reserve funds held over and voting rights.

Shareholders who wish to sell must give other shareholders first right of refusal (and any other [relevant] protection).

2 The new accountant would review the past three years accounts and determine what dividends should be paid to the Vagg entity. Dividends denied to us through the dodgy tax avoidance scheme should be paid from Ray’s personal funds.

3 A share purchase agreement be made with Zeb and Kylie for 8% equity to go with the 2% promised for equipment transferred to Windbox Pty Ltd. The 10% transferred to Zeb and Kylie to come from Ray’s 85% shareholding.

Alternatively, it could be put to Ray that it would be in his best interest to sell down his total shareholding in the manner described in our letter of offer. There are very significant advantages for Ray in agreeing for such a sale.

Eg: Ray would achieve a sale price of approx. $5m for his 85% share, double his initial investment and a very good interest (say 5% over the next five years) if he were to offer vendor finance. It would remove Windbox Pty Ltd from his portfolio of companies and the serious dangers from corporate regulators that company holds for him. It is no exaggeration to suggest such a sale would be $10m or more a better deal for Ray than no agreement.

There is one more possibility that Ray may not have considered. Given the high regard that Zeb and Kylie have in the Kalkarindji community and with the traditional owners it is quite possible that without Zeb and Kylie on board the CLC might not renew our lease.

This would leave Windbox Pty Ltd with a herd of cattle that no one wants and nowhere to graze them. A fire sale which would mean selling adult cattle for chopper price might return between $3m and $3.5m.

Zeb and Kylie, I think on reflection I should leave out that last paragraph. Let me know what you think.

(underlining added by me)

[45] Counsel for Windbox relied on this and other emails as evidence of a conspiracy between Mr Leslie and Mr Vagg to frustrate Windbox’s attempts to obtain the grazing licenses and enable Mr Leslie to apply for the grazing licenses and complete with Windbox (the Vagg conspiracy). It is not known whether Mr Vagg sent such an email to Mr Murphy.
[46] On 9 November 2017, Mr Vagg sent Mr Leslie another copy of the two emails of 23 and 26 August 2017 concerning the 16 August meeting.[57] In his email to Mr Leslie[58] Mr Vagg said:

This is a copy of mail between Peter Murphy and me and then Peter Murphy’s mail to Ray re our discussions regarding our meeting. This is where Ray gets the figure that we valued the property at $80,000 per 1%. Peter Murphy may not have had a good understanding of this in his letter to Ray.

That figure was simply a starting price based on what was set out mid-term in Ray’s [ridiculous] sale offer based on weaner rates etc. I was clear in other mail that the price for the additional 8% must be by agreement between Ray, Zeb and Kylie and would come from Ray’s share-holding.

When we made the offer to Ray for a buyout that figure came down to our original purchase price ($5.8m ---- $58,000 per 1% plus 10% = $63,800). We justified this discounted figure for two reason. 1 You had been waiting for a decision on this for four years or more.

And 2 WE now have an offer from the CLC and Traditional Owners of Ten Years only.

[47] On 11 December 2017, Mr Vagg emailed (and also posted a hard copy to) Mr Dodd a “proposal to address the serious matters of contention regarding the management of the Windbox Pty Ltd accounts.”[59] The accompanying proposal stated:

The best case scenario for a continuance of the Windbox Pty Ltd partnership with the inclusion of Zeb and Kylie as partners will come from an agreement such as:

1 Agree to immediately seek and appoint an independent accountant for Windbox Pty Ltd.

2 The new accountant will enter discussions with you and me to prepare a shareholder agreement that will enshrine minority shareholders rights and set in place policies for such items as dividend distributions, a reserve funding account, infrastructure spending and shareholder voting rights. The shareholder agreement would act as a constitution for our company that could only be changed by unanimous agreement. For you to act as if you are the only shareholder is no longer acceptable and does not meet today’s ethical business standards.

3 The new accountant will review the past seven year’s accounts and report to directors any matters that may need attention.

4 Complete a sale agreement with Zeb and Kylie for an additional 8% to go with the 2% earned in return for equipment supplied and services rendered over the past eight years. Given that this sale has been promised for five years or more I suggest it should be a vendor financed sale effective from the day of signing so that Zeb and Kylie can receive immediate benefit as a 10% shareholder. That the 10% transferred to Zeb and Kylie is from your shareholding follows from an earlier commitment that you would be prepared to sell down your shareholding to 50% to any existing partner.

The price of the sale to Zeb and Kylie should reflect the fact that at this time we do not have a lease agreement in place and the best offer we have is for five years with one further five year option. Your price/performance table dated September 25, 2015 suggest a unit price of $65,000 for 70% weaner rate. That is probably about where we are now so that may be a fair price, but without the need for an incentive clause. When our employee works from daylight to dark seven days a week and has not taken leave most years in the past eight to talk of the need for an incentive is not realistic.

We believe the vendor funding suggestion is justified in that increase in value of our lease is a result of input from each partner and the hard work of our management couple. But to date there is only one entity that has benefited.

5 Immediately pay withheld dividends from past 7 years to the Vagg Entity ($168,000) Dividends on which tax has already been paid. (See footnote).

So Ray, the choice is there for you to make. Our relationship is not good at the moment but it is not too late to save our partnership and allow all partners to share in a prosperous future. We believe the changes we seek are fair and reasonable and without doubt in your best interest.

Of course we are prepared to discuss details for agreement on this proposal but the fundamentals will remain and we are not prepared to accept further delay.

We therefore extend to you a period of seven days (18/12/17) only for a response to our proposal before taking direct action with the corporate regulators and/or the Tax Office.

(underlining added by me)

[48] Mr Vagg sent a copy of that email to Mr Leslie and Mr Murphy, and stated that he would keep them advised of any developments.
[49] By around the end of 2017 Mr Leslie was becoming increasingly concerned about Mr Dodd and Mr Vagg falling out. This made it hard for Mr Leslie to obtain instructions from them, particularly Mr Vagg, on the running of the Station. Mr Leslie was also concerned that if Mr Dodd and Mr Vagg fell out completely he would never receive the promised shares in Windbox or payment for his equipment. Mr Vagg told Mr Leslie that he would be meeting with Mr Dodd in Melbourne on 3 January and they would try to sit down together and sort everything out. Mr Vagg asked Mr Leslie to attend the meeting and bring with him full details regarding cattle on the Station and also details of the equipment and assets that he owned and had been using on the Station.[60]

January 2018

[50] Mr Leslie and Ms Rowbottom decided that they needed to attend the meeting on 3 January 2018 and that they would drive down to Melbourne after visiting Mr Leslie’s parents in New South Wales over the New Year period. The two of them discussed the forthcoming meeting as they drove to Melbourne. Mr Leslie was still concerned that Mr Dodd and Mr Vagg were not going to give him any shares in Windbox or remunerate him for all his efforts and his equipment. Mr Leslie and Ms Rowbottom agreed that they were not going to leave the meeting without something in writing from Mr Dodd and Mr Vagg agreeing that they were to be given shares in Windbox and “allowed to further buy in on agreed terms.” At that time Mr Leslie still thought that Mr Dodd and Mr Vagg may be in cahoots in relation to stringing him and Ms Rowbottom along. He wanted a solid agreement and commitment from them.[61]
[51] At the meeting, Mr Vagg and Mr Dodd were in open argument, particularly in relation to Mr Vagg’s allegations of fraudulent accounting on the part of Mr Dodd. Mr Leslie recalled the following exchange:

Ray: ... None of this matters anyway as I have lined up an overseas buyer. I’m selling and getting out. None of this is my problem anymore.

Me / Kylie: It seems pretty clear that there is little future for us with you. We are going to think about resigning, but we need to be paid out for the shares that have been promised to us and for all of the gear we own that is used in running the station.

Ray: Don’t worry about that, you will get it. I will try and work out some sort of deal for you with the incoming owners.[62]

[52] Following the meeting, Mr Leslie and Ms Rowbottom decided that they were definitely going to resign from their employment with Windbox and that if Messrs Vagg and Dodd wanted them to continue working on the Station it would only be on the basis that they were independent contractors. Mr Leslie said that this would mean that he could be paid at a better rate for supplying contract services and he could also subcontract other people to come and help him on the Station so that he could do a lot more work flying and mustering on other cattle stations.[63]
[53] On 4 January 2018, Mr Leslie telephoned his solicitor, Mr Markus Spazzapan of Ward Keller. A file note made by Mr Spazzapan of that telephone conversation records:[64]

4/1/18 – ZEBB LESLIE – P/SHIP – TA from ZL on leave at present back in NT next week. One of the partners has been doing $1M dodgy on the other two partners of which he is one. ZL 2% should be 10% the other two $17% and 81%. The 81% partner is the one doing the money dodgy.

Assets are a leasehold over aboriginal land 14,000 head of cattle. Value of $6.2M and 1 ha freehold on which is situated residence and meatworks.

He is the man on the ground, runs the cattle and the meatworks. He is the meat inspector also.

81% partner offered ZL $250k. Not enough for ZL he has put $60k of assets in and wants the value back. Assets now not worth much.

He is currently negotiating with the cattle land owners for new agistment lease. They will not lease it to the P/ship if ZL is not part of the deal. He has the upper hand. He wants to negotiate to get out of the P/ship on best $ he can. Get employed to manage the meatworks and the cattle for 5 yr or until sold. He to retain use of house. He can then negotiate for the cattle land lease and restock. There is no option available but for ZL to be employed to run the meatworks as he is the inspector and the place cannot run unless there is one and getting one in will be virtually impossible. (08:48 to 14:38).

[54] On 7 January 2018, Mr Spazzapan emailed Mr Leslie regarding “Partnership Issues”.[65] On the same day Mr Leslie emailed Mr Dodd and Mr Vagg, attaching a letter which stated:[66]

Hi Ray & Bob,

As discussed on Wednesday 3/01/18. We would like to advise that we will be resigning from our positions of station managers taking our 2% share that was offered to us. On top of this 2% share payout you both agreed at the meeting to reimburse us for all our gear and infrastructure that we have put into the place using our own funds. A list for this will be provided once we are back.

We would also like to offer our future services as contractors and would be happy to continue running the meatworks & station at an agreed rate through our ABN for a period of 2 years unless sold prior. If you decide that this is not an option, we will leave within a month, or sooner if you would prefer.

Please advise as to how you would like to proceed with this by Friday 19/01/2018.

(underlining added by me)

[55] On 10 January 2018, Mr Dodd emailed Mr Leslie, copying Mr Vagg, stating that:[67]

As we agreed at our last meeting we will now give you a 2% share of the business & also pay you for the goods that you bought with you & are used in the business. As I explained in my email to you on 8/11/2017, you need to list those items.

We are very keen for you & Kylie to continue to run the business & I will be encouraging any new shareholder to keep you on.

(underlining added by me)

[56] By 12 January 2018, Mr Leslie was in Alice Springs (on his drive back to the Station with Ms Rowbottom). He decided to enquire about various cattle stations that he could potentially run as station manager and over which he could potentially obtain grazing licences. He said he began making these inquiries because, by this time, he thought he may only have limited time left working on the Station and he needed to secure what he was going to do for himself and his family.[68]
[57] Mr Leslie telephoned Mr Steve Ellis (who has a lot of knowledge about Central Australian pastoral lands) and told Mr Ellis that he would probably be leaving the Station soon and wanted to find out what opportunities there were regarding cattle stations in around Alice Springs. Mr Ellis identified three good properties that might be worth investigating: Mount Wedge, Mount Allen and Yuendumu. Mr Leslie then tried, unsuccessfully, to hire a helicopter so he could fly over and inspect some of those properties.[69]
[58] Mr Leslie also had a telephone discussion with a friend of his, Mr Rob Cook. Mr Leslie told him that he had been thinking about trying to obtain a licence over Mount Wedge, Mount Allan or Yuendumu because it looked like he would have to leave the Station soon. Mr Cook suggested that Mr Leslie consider applying for grazing licences over the Station properties. Mr Leslie said that this was the first time that it occurred to him that he could apply for the licences over the Station properties.[70]
[59] On 13 January 2018, Mr Spazzapan emailed Mr Leslie about the Kalkarindji Meatworks[71]. Ms Rowbottom also emailed Mr Spazzapan on the same topic.[72] There is no evidence, or inference that can be drawn, that Mr Leslie spoke to Mr Spazzapan then, or any time before 7 February 2018, about the possibility of applying for the grazing licences.
[60] On 16 January 2018, Ms Rowbottom sent Mr Spazzapan a draft of a letter which she and Mr Leslie proposed to send to Windbox. She also sent him a copy of some earlier correspondence, including the emails in September and October 2015 about Windbox’s promises to give them shares in Windbox, and Mr Dodd’s email of 10 January 2018.[73] Mr Spazzapan suggested some edits to the letter.[74]
[61] On 17 January 2018, Mr Leslie sent the letter to Mr Vagg and Mr Dodd. It was attached to an email sent to each of them bearing the subject “Letter 17/01/18”. The letter stated:[75]

Just to clarify, you understand that we are resigning from our positions with Windbox. This will take place in a fortnight from today’s date 31/01/2018. You have said that you would be happy for us to continue managing the meatworks and station but this will be done with us as contractors through our ABN and we will only be doing it for 2 years unless the business is transferred/sold prior. We would like this to be at a rate of $4230 +GST per fortnight with a governess, accommodation, food, electricity and fuel to be supplied by, and at Windbox’s (as per the current agreement) expense. Our pay periods will coincide with the ADP pay period.

We were also asking you for a payout of the 2% share offered to us. Back on 28th September 2015 in an email sent to us you valued the shares at $65,000 each. The description of the $130,000 payment will need to be discussed so as to minimize any potential taxation liability.

(underlining added by me)

[62] On 22 January 2018, Mr Vagg responded to the letter of 17 January by email to Mr Leslie, copied to Mr Dodd, stating that:[76]

I have read your letter and request re the 2% offered to be paid as an upfront payment rather than a share of the business and payment for the equipment transferred to Windbox Pty Ltd is reasonable and has my support. I also support your proposed remuneration and entitlement for your continued role of the day to day management of the property and meatworks on a contract basis to be paid fortnightly. I am copying this mail to Ray and urge him to respond in a timely manner.

(underlining added by me)

[63] Mr Dodd emailed back to Mr Vagg on the same day, without copying in Mr Leslie, stating that:[77]

We are in agreement with almost everything except I didn’t offer 2% upfront. I offered Zebb a 2% shareholding. How do you value 2% up front, what happens if I sell my share for more or less. Are you prepared to put a valuation on this 2% that you would be happy to accept? The only honest price is the sale price!

[64] On 23 January 2018, Mr Vagg responded to Mr Dodd, without copying in Mr Leslie, stating that:[78]

... Let me make some comment on your reply. I think your response lacks logic.

First sentence you say: We are in agreement with almost everything except I didn’t offer 2% upfront I offered Zebb a 2% shareholding. I think Zebb’s letter makes it clear that they are not interested in buying a share in the business. He is asking for a cash payment upfront as compensation for the 2% equity promised. The $65,000 per 1% is at the lower end of the scale as far as valuation is concerned. Effectively Zebb has put a valuation as $6.5m for 100%. Just half of the target price of your sale document. If you are lucky enough to find a buyer at more than $6.5m for 100% then you are better off.

The payment in cash from the Windbox accounts would have the advantage of not affecting the percentage shareholding of the Dodds or Vaggs.

Your question to me. Are you prepared to put a valuation on this 2% that you would be happy to accept? This question is ambiguous. I have agreed to the valuation that Zeb has put on his request for a cash payments compensation for the 2% equity promised. Does that mean I would be a seller for our 15% at that valuation? No it does not. I could ask you the same question. At what price would you be prepared to sell your shareholding?

[65] Mr Dodd responded to that email later that day, this time copying in Mr Pearson but not Mr Leslie, and still using the subject heading “Re: Letter 17/01/18”. He said:[79]

I will be happy to sell at $130,000 per 1%.

You agree with Zebb’s demands but have you looked at the details – eg 13 items of furniture that could have come from your apartments, can you categorically say that none of these came from there. Did you give him the okay to buy these furniture items?

I have referred Zebb’s demands to John Pearson to check the legality and provide an employment agreement.

(underlining added by me)

[66] Early on 24 January 2018, Mr Vagg forwarded Mr Dodd’s email of 23 January and the rest of the email chain with “Letter 17/01/18” as the subject, to Mr Leslie and Ms Rowbottom, without copying in Mr Dodd.[80] He said:

This is the latest from Ray. I have decided to share it with you considering Ray has shared my private mail with John Pearson. I have not yet responded to Ray’s latest but will do so tomorrow. ...

However I have some thoughts. I think his attitude to you is mean, petty and contemptible. I believe he has no intention of granting your request and is simple (sic) continuing with his established plan. Frustrate, delay and deny.

[67] Late on 24 January 2018, Mr Dodd sent an email to Mr Vagg and Mr Leslie, with the subject: “Instructions to Graham Cole re licences.” He requested their comments on a proposed letter to Mr Cole regarding the grazing licences.[81] The draft read as follows:

Given that the year is now 2018 & we haven’t had a grazing licence since 2015 & the CLC have made an offer which is exactly the same as our previous lease (with the additional land at Berta Warta).

There seems little hope of certainty so the only certainty for us is 5+5 year leases.

We wish to accept their offer with a few small amendments

1 The existing licence for Berta Warta is 66.5 Sq kms & maximum stock levels are set at 600, the previous licence set levels at 600 for us & 100 on behalf of the traditional owners making a maximum of 700.

2 The new area of Berta is 45.7 sq kms but there has been no allowance for maximum stock numbers, as we don’t wish to overgraze this area we would be happy for max numbers to be on the same basis as the original licence which would be 473.

3 We accept the offer made by the Yurtji Aboriginal Corporation to improve infrastructure at approximately $60,000.

4 From time to time we have had to purchase large quantities of hay for Cattle feed, we would like an in principle agreement to allow us to grow our own hay limited to 0.05% of the lease, sited in agreement with the traditional owners.

5 We also request that the CLC expedite a licence on Hooker Creek, we believe that a fair & reasonable time to achieve this would be 6 to 8 months.

6 We request that the licence period commence on 1/03/2018 as there has been agreement for from the traditional owners. If clause 4 is going to hold up the process we are prepared to negotiate later.

[68] Ms Rowbottom said that she did not show that email to Mr Leslie. Although emails were usually addressed to and sent from the email address of Mr Leslie, it was Ms Rowbottom who accessed and read the emails. She did not always pass them or their contents on to Mr Leslie. She did not pass this email on to Mr Leslie because they had already told Mr Dodd that they were going to be ceasing their employment with Windbox and so did not need to respond to the letter. They did not want to have any further involvement. Ms Rowbottom also said she would not have brought Mr Dodd’s later email of 29 January to Mr Leslie’s attention.
[69] Mr Leslie deposed that he does not recall seeing the email of 24 January, or Mr Dodd’s later email of 29 January, until they were shown to him in the course of preparing his affidavit of 9 February 2019. He said that at that time he and Ms Rowbottom were in a state of limbo, not knowing whether they would be leaving the Station after 31 January, and, at the same time, keeping the Station running and in good condition without being able to receive clear instructions from the directors. He said there is a good chance that Ms Rowbottom did not bring the emails to his attention, and even if she did, he would not have responded as he had more pressing things on his mind, namely whether he was staying on the Station or leaving.[82] I accept the evidence of Ms Rowbottom and Mr Leslie about those two emails.
[70] Mr Dodd agreed that his email of 24 January suggesting that Windbox accept terms of 5 + 5 years was a radical change in his position. He said it was caused by his frustration both with his partner and his manager, and he wanted to shore up his position [83]
[71] On Sunday 28 January 2018, Mr Leslie sent another letter to Mr Dodd and Mr Vagg, attached to an email with the subject heading: “Letter 28/01/18”. The letter said:[84]

We have noted that we have not had any response to our letter dated 17/01/18. Given there has been no response or negotiation we are assuming that you have organised a replacement for us. Please note that we advised in the letter that 31/01/18 will be our last day of employment.

As we have not yet had any response we wish to advise that we have drafted letters to both the CLC and to the NT Chief Meat Inspector of our resignation. As the meatworks runs under the obligation of needing a certified meat inspector, it will need to cease operation as the current licence has Zebb listed as the certified meat inspector. You will need to advise as to whom you have replacing us, so we can sign the NT117 processing stamp over as well as the NTLIS and Levies contact person.

If you could please advise as to the vacation date that you would like us out of the house and if you will be purchasing items listed in the letter 17/01/18.

(underlining added by me)

[72] At 8.58 am on Monday, 29 January 2018, Mr Dodd sent an email to Mr Leslie, copied to Mr Vagg and Mr Pearson, using the subject "Letter 28/02/18”.[85] Mr Dodd said:

I was not able to respond to your offer as I was awaiting legal advice as to whether I could accept it.

You have received John Pearson’s advice that it is not legal to employ you and Kylie as subcontractors therefore you have to be employed as employees on salary. I am prepared to increase your gross salary by .... Obviously this offer only applies until there are changes to the current ownership.

Please let me know if you wish to accept this offer.

[73] Presumably Mr Dodd’s reference to Mr Leslie having received Mr Pearson’s advice is a reference to a letter dated 24 January 2018, purportedly sent by email to Messrs Dodd, Vagg and Leslie at 4.59 pm that day.[86] The subject heading of that email was “Accountant Letter re Kalkarindji Meat Supply”. It said:

Dear Zebb

I am writing to you as accountant for Kalkarindji Meat Supply. I am concerned as to the financial arrangements as to your payment as a salary and your request to be paid as an independent contractor. The statutory requirements as to whether you are employed 80% of your time at Kalkarindji Meat Supply and to your other arrangements as a helicopter pilot are not associated as an employee.

Your income as a helicopter pilot is a separate issue but your employment as a manager of Kalkarindji Meat Supply is simply Employer / Employee.

...

[74] Mr Leslie said he had not seen Mr Pearson’s letter before 29 January when Mr Pearson sent it to him again under cover of an email sent to him (but not copied to Mr Dodd and Mr Vagg) at 10.56 am that day.[87] It seems it had been sent to an incorrect email address.
[75] I infer from Mr Dodd’s 8.58 am email of 29 January, that he had received Mr Pearson’s letter on 24 January. I do not understand Mr Dodd’s reference to him “awaiting legal advice as to whether [he] could accept [Mr Leslie’s] offer” to continue to work at the Meatworks and property as a contractor following the cessation of his employment on 31 January. This offer had been made on 7 January and again on 17 January. There has been no evidence of Mr Dodd having sought or obtained “legal advice” about Mr Leslie’s offer. Even if he did seek or obtain legal advice, it was never provided to Mr Leslie or his advisors. I can only infer that Mr Dodd’s reference to “legal advice” was at best a mistaken, at worst a deliberately misleading, reference to advice he received from his accountant Mr Pearson, on or before Mr Pearson’s letter of 24 January. If that is so, it was somewhat ingenuous for Mr Dodd to use this as an excuse for not responding earlier given the urgency of the matter, and for not addressing the other issues raised in Mr Leslie’s and Ms Rowbottom’s letter of 7 January and their follow-up letter of 17 January.
[76] Mr Leslie and Ms Rowbottom responded to Mr Dodd’s 8.58 am email later that day, saying amongst other things:[88]

H Ray and Bob,

We have received your email of offer and have also finally received the email John said he sent on the 24/01/18. Note this email was not received by us until today as he had listed an incorrect email address.

We do not accept the offer you have made, and you have not addressed the other issues outlined in our letter dated 17/01/18. This is starting to show similar signs to the past eight years of promises that were continually pushed to the side, an issue that has brought us to this current situation. Just to reiterate the other items needing to be addressed are the purchase of goods and infrastructure we have put into the place as well as the 2% payout.

As nothing that we have put forward has been addressed, we are still set to finish on Wednesday 31/01/18. As we have stated we are only wishing to continue on as contractors. If you would like us to stay on until you find our replacement or until we can come to an agreement this will only be done through our ABN as a renegotiated rate.

[77] Also on Monday 29 January, Mr Dodd sent himself an email with the subject heading: “FW: Instructions to Graham Cole re CLC Licenses”.[89] He copied Mr Vagg and Mr Leslie, but not Mr Cole. The email did not contain any message to anyone, for example, to explain why it was being sent to Messrs Vagg and Leslie. It appears to be copy of the draft contained in his email of 24 January[90] but added the words “Hi Graham” at the start, and additional text at the end, namely:

7. Graham could you please see if we can finalise this matter in a timely manner

Regards

Ray Dodd

Managing Director

Windbox P/L

[78] On 30 January, using the same subject heading “Instructions to Graham Cole re Licenses” Mr Vagg sent an email back to Mr Dodd, copying in Mr Leslie.[91] Amongst other things he said that he had not agreed to Windbox accepting the CLC’s offer, and that there remain a number of issues that need to be settled “before we can go on to the next phase”. These included:

He also said:

[79] It would have been clear to Mr Vagg, Mr Leslie and Ms Rowbottom that Mr Dodd wanted to sell Windbox, or at least his 85% share.[92] It would also have been clear to Mr Leslie and Ms Rowbottom that Mr Dodd was going to continue to string them along without addressing their concerns and despite the deadlines they had imposed for the termination of their employment.
[80] In an email to Mr Leslie and Mr Vagg sent at 3.38 pm on 30 January Mr Dodd continued to insist that it was not legal for Windbox to employ Mr Leslie as a contractor.[93] He said that Mr Leslie had two options: “accept my offer of a substantial pay rise or resign.” He also said that:

Any Company correspondence is to be sent via me not direct from you.

[81] Mr Leslie and Ms Rowbottom then sought assistance from Mr Spazzapan and provided him with a copy of Mr Pearson’s letter of 24 January 2018. At 1.31 pm on 31 January they emailed to Mr Dodd, and copied to Mr Vagg, a letter to Mr Dodd that had been settled for them by Mr Spazzapan.[94] The letter stated that they had obtained advice from an accountant and a taxation lawyer to the effect that the advice of Pearson Partners was incorrect and that they could be engaged as contractors.[95] The letter set out the reasoning behind that advice and dealt with Pearson Partners’ concerns about the “80/20 rule”. The letter also repeated that they did not wish to be engaged as employees and that they were “prepared to supply [their] services pursuant to an ABN.” They also complained that their concerns about being recompensed for the 2% share and for Mr Leslie’s equipment had still not been addressed, and that Mr Dodd had suddenly suggested they had additional obligations. They proposed a compromise which included three conditions, one of which was that Mr Leslie and Ms Rowbottom would “provide services pursuant to an ABN.” They ended their letter by saying:

You need to understand that I do not longer wish to be strung along and require our relationship to be placed on a commercial footing.

In the event the proposed compromise position set out is not accepted by COB today, I will move on as I have previously informed you of.

[82] Mr Dodd did not respond to that ultimatum.
[83] On 31 January Ms Wilkie of CLC sent an email to Mr Cole.[96] Ms Wilkie referred back to her emails of 4 August 2017 and 3 October 2017[97] and informed him that CLC wished to progress the matters in the next few months. She requested they discuss the matters sometime over the next few days.

1 February to 27 April 2018

[84] Mr Leslie and Ms Rowbottom remained on the Station waiting for confirmation from Mr Dodd and Mr Vagg about whether they were to leave the Station or stay on as contractors.[98]
[85] It seems that Mr Dodd had some communication with Mr Cole on or before 1 February. At 12.57 pm on 1 February 2018, Mr Cole sent an email to Mr Dodd, also copied to Mr Vagg, with the subject heading: “Windbox Pty Ltd – grazing licenses – Daguragu Aboriginal Land Trust”.[99] That email included Mr Cole’s email to Ms Wilkie of 26 July 2017 requesting an initial term of 10 years with two options for two further terms of eight years each, Ms Wilkie’s reply of 4 August 2017, and Ms Wilkie’s subsequent emails to Mr Cole on 3 October and 6 October 2017. Mr Cole’s email had a number of attachments, namely: “D17-94129 Additional paddock – Hooker Creek ALT.PDF”; “Daguragu Aboriginal Land Trust – Grazing Licenses”; and “DRAFT Grazing Licence.doc”. The first attachment was a map, apparently relating to some land held by the Hooker Creek Aboriginal Land Trust. The second attachment was Ms Wilkie’s email to Mr Cole dated 19 October 2016 referred to in [28] above. The third was a pro forma CLC Grazing Licence containing the date 2015.
[86] At 1.38 pm on 1 February, Mr Cole sent another email to Mr Dodd, copied to Mr Vagg, with the subject heading: “Re Windbox Pty Ltd – pastoral licenses at Kalkarindji”.[100] The email said: “Ray as requested”. Mr Cole’s email included Mr Cole’s email to Ms Wilkie of 26 July 2017, and Ms Wilkie’s reply email to Mr Cole of 4 August 2017. Shortly after that, Mr Dodd replied to Mr Cole, copying in Mr Vagg. Windbox has deleted all the text from that reply email.[101] The email appears to contain four paragraphs. I do not know what was said in the email. I note however that it bore the same subject heading “Re Windbox Pty Ltd – pastoral licenses at Kalkarindji” as Mr Cole’s email sent at 1.38 pm that day.
[87] Later that day, at about 5 pm, Mr Dodd emailed Mr Vagg, responding to his email of 30 January concerning the subject: “Re: Instructions to Graham Cole re Licenses” (referred to in [78]<[102] above).102 Amongst other things he said:

“Graham Cole” I hope you agree that 5 + 5 years is better than 0 years, don’t you think it is better to negotiate for changes after we have 10 years.

...

“Zebb Kylie” I will not enter into an illegal contract with Zebb, you have seen the emails, we now have to wait for a Legal Opinion.

“Zebb’s sale items” some items don’t look right to me therefore I asked you a question which you have not answered. Is Zebb honest or are you covering for him by not saying?

100% Sale. I am selling the 85% that I own. I am not including your 15% as you said you did not want to sell, the new owners don’t have to own 100% to make the decisions, including if they will pay dividends.

(underlining added by me)

[88] At 8.40 pm on 1 February, Mr Vagg forwarded Mr Cole’s email of 12.57 pm (including the attachments) to Mr Leslie.[103] At 8.42 pm Mr Vagg emailed Mr Leslie a copy of his email with Mr Dodd headed “Re: Instructions to Graham Cole re Licenses” (referred to in [87] above). Mr Leslie deposed that prior to making his affidavit he could not recall Mr Vagg’s emails regarding Windbox’s negotiations to obtain grazing licenses, and that if he had seen them he would have ignored them for the same reasons that he gave for ignoring the previous emails (of 24 and 29 January) about the [104]e topic.104
[89] At 10.57 pm on 1 February, Ms Rowbottom sent an email to Mr Dodd. It said:[105]

As per our email 31.01.18 we are needing to know where you stand with our employment and other matters. We will need to know by midday 2/02/18 as you will need to advise customers such as the Kalkarindji store and Lajamanu store as to whether you can supply them with meat next week as we are due to kill on Saturday morning. Myself and Zebb have developed a professional relationship with both lot of managers and do not wish to let them down.

If there is no response we will continue packing and cease all work. We have supplied sufficient notice, as this has been going on since we met in Melbourne and a letter was sent over a fortnight ago advising you that the 31/01/18 would be our last day if nothing was agreed upon. We have been more than lenient given we are still operating.

[90] Shortly after the deadline of midday 2 February, Mr Dodd emailed back to Mr Leslie at 12.20 pm, reiterating his advice that it was not legal to employ Mr Leslie as a contractor.[106] He said nothing in response to Mr Leslie’s detailed email of 30 January where he had set out the basis of the legal and accounting advice that he had received.
[91] Following that email, Mr Leslie had a telephone conversation with Mr Dodd during which Mr Dodd said that he would find a replacement station manager but, in the meantime, he wished Mr Leslie to stay on as a contractor for a month, or longer if they could reach an agreement.[107]
[92] Mr Leslie then emailed Mr Dodd, copying Mr Vagg, stating that:[108]

As discussed on the phone earlier today our employer/employee status has ceased as of 31/01/18. We have both agreed, that you are now happy for us to continue on as contractors until 2/03/18. We will hopefully by then have come to an agreement as to whether we can continue on as contractors based on the final advice on the 80/20 rule.

[93] Mr Dodd responded by email, also copied to Mr Vagg, at 4.24 pm:[109]

Thanks for your offer to work as contractors from 31/02/2018 to 2/03/2018 or longer if possible.

I accept your offer. Please send Accounts an Invoice for $4230 + GST each fortnight.

[94] Mr Leslie said that during that couple of days until his discussion and emails with Mr Dodd on 2 February, he started to think seriously about applying for the grazing licences over the Station properties.[110] He decided that the best way to make tentative first steps toward applying for the grazing licences would be to send an expression of interest to the CLC.[111]
[95] On 2 February Mr Leslie called Ms Kimberly McIntosh at the CLC to enquire whether he and Ms Rowbottom could apply for the grazing licences.[112] Ms McIntosh then checked internally at the CLC and called Mr Leslie back a short time later telling him that he and Ms Rowbottom could apply.[113]
[96] At 1.49pm on 2 February, Mr Leslie lodged Expressions of Interest for the three grazing licences, by email to Ms McIntosh as follows:[114]

We write to you in relation to the grazing licences for Daguragu Land Trust. I, Zebb Leslie and Kylie Rowbottom wish to express our interest in applying for the grazing licences. Please note that we do this as our own separate entity away from Windbox Pty Ltd. The grazing licences we wish to apply our interest in are:

➢ McDonald’s Yard

➢ Berta Warta

➢ Seale, Spring & River Paddocks and North Seale & Neave Ridge Paddocks (North Paddocks)

As you are aware we have been the managers for this area of the past 8 years and feel we have developed a great relationship with the community and surrounding businesses and would like to continue this relationship in the future. We have recently resigned from Windbox Pty Ltd, but would like to continue our future here in Kalkarindji.

[97] On 6 February 2018, Ms Wilkie of the CLC emailed Mr Cole an “updated draft of the Grazing Licence in this matter”, which “replaces all previous drafts forwarded in this matter”. Ms Wilkie said: “I look forward to hearing further from you about your client’s intentions.”[115] Mr Cole responded the same day: “I hope to get back to you in the next few days. I am instructed by two separate directors and they are coordinating the company’s position at the moment.”[116] The “updated draft” was not put into evidence.
[98] Also on 6 February 2018, according to a “Change to company details” form signed by Mr Dodd on 26 February 2018 and lodged with the Australian Securities and Investments Commission, Mr Vagg ceased to be a director of Windbox.[117] It seems that this change was made without the knowledge or consent of Mr Vagg. Mr Leslie and Ms Rowbottom remained under the impression that Mr Vagg was still a director until they left the Station late in April. This was the case despite Mr Leslie attempting to contact both Mr Dodd and Mr Vagg for instructions during that period. Mr Vagg informed Ms Wilkie of this change in an email 13 May. Amongst other things he expressed his “serious disagreement Ray Dodd’s outrageous treatment of our former property management couple, Zebb Leslie and Kylie Rowbottom, who were our most loyal and hard-working employees. Zebb and Kylie have been sacked and denied promised reward for past works and their undeniable contribution to the development of our lease and cattle herd.”[118]
[99] On 7 February 2018, Ms McIntosh emailed Mr Leslie, attaching a pastoral proposal form and stating that:[119]

When filling it out please add in your business proposal (you know how this works if not call me).

Be very clear on whether you will be seeking to contract in your personal capacity or through a corporate structure.

We will also need the name of your legal representative.

[100] On 13 February Ms Wilkie and Mr Cole had a telephone conversation during which they discussed the draft grazing licence which Ms Wilkie had sent to Mr Cole on 6 February. There is no evidence as to whether or not the Vagg amendment was included in the draft.[120] Ms Wilkie’s diary note of that meeting concluded with a note to the effect that Mr Cole was “largely OK” with the draft and he would “seek updated instructions from [his] client and revert.”[121]
[101] On 16 February 2018, Mr Leslie emailed Mr Dodd and Mr Vagg, stating that:[122]

If next week is dry, I will need to start pulling weaners off spayed and cull cows at Burta Wurta to keep condition on sale cows. What we need to know is, as we have been made aware Windbox is for sale. Do we need to leave cows as long tails for a bangtail muster later on if a sale comes along? Also, we would like to know if you want us to make any cattle sales or do you want the numbers on the property for the sale. Please let us know because if it doesn’t rain we will need to start destocking as we are currently short 18 inches of our average rainfall.

[102] On 19 February 2018 by email with subject heading “muster” and marked “high” importance, Mr Leslie forwarded his email of 16 February 2018 to Mr Dodd, and said: “Please see below noting that it is now in reference to this week ...”. Mr Dodd responded immediately instructing Mr Leslie to “pull weaners off” and leave the cows with long tails. He also asked what prices Elders were quoting for cull cows and when they wanted them.[123]
[103] Also on 19 February 2018, Mr Leslie and Ms Rowbottom emailed an “Application draft” to Ms McIntosh at CLC.[124] Ms Rowbottom had read the pastoral proposal form emailed by Ms McIntosh on 7 February to see what was needed and realised there was a large amount of information required including public liability insurance and a business plan.[125] Ms Rowbottom proceeded to arrange the insurance.[126] However, in relation to the business plan, she had no idea what this entailed and searched online to find information concerning business plans and the information to be included in such a document.[127]
[104] On 5 March 2018 Mr Cole emailed Ms Wilkie saying that he had received up-to-date instructions from his client which he would go through over the weekend. He also sent Ms Wilkie an email seeking further information, and also seeking agreement to allow Windbox to grow its own hay on part of the land.[128]
[105] On 5 March 2018 Mr Leslie and Ms Rowbottom sent a completed proposal form and a business plan to Ms McIntosh.[129] On 6 March Ms McIntosh sent a copy of the completed application to Ms Wilkie.[130] On 8 March, Ms Wilkie emailed Mr Leslie acknowledging receipt of the application, and informed Mr Leslie of the existence of a competing application for the three grazing licences.[131]
[106] On 13 March, Mr Leslie and Ms Rowbottom sent an email to Mr Dodd and Mr Vagg.[132] They said they had been trying to call Mr Vagg for the past week however his telephone kept ringing out and they wanted him to reply. Secondly, they pointed out that there had not been enough rain and it was important to start destocking as there would not be enough feed or water given the current stock numbers on the property. They sought approval “ASAP” to start destocking and to take advantage of current prices. Mr Vagg responded immediately agreeing with Mr Leslie’s recommendations. He said: “in the absence of any response from Ray you have my authority to begin reduction of cattle numbers immediately.”[133] Mr Vagg must have not been aware that he was no longer a director of the Company at this time.
[107] On 16 March Mr Dodd emailed Mr Leslie in response to the email of 13 March, and copied Mr Vagg into that email.[134] He said:

... I agree with Bob and yourself that we should sell as many saleable cattle as soon as we can get a reasonable price.

Please let us know what prices are being offered & what numbers we can sell.

[108] Mr Leslie continued to make arrangements to sell cattle and de-stock. This involved him arranging contractors for transport and sale. At about the same time he became aware of newspaper advertisements for the role of Station Manager for the Station properties. He rang Mr Dodd and told him that he was negotiating contracts that would be carried out in the following few months. He told Mr Dodd that he wanted to be guaranteed that he would still be working on the Station by at least June so he could see those contracts through because he did not want to make arrangements that he could not follow through on. Mr Dodd assured him that he would still be working there in June. Mr Leslie asked him how he could guarantee that because he had seen advertisements in the newspaper for the Station Manager position. He said that Mr Dodd said: “Those ads must have been taken out by the new owners.” When Mr Leslie repeated his concern about not being there if the new owners replaced him in the meantime Mr Dodd said: “OK, don’t worry about it. I’ll get the new manager to destock. You are to stop once you have finished what you are already doing.”[135]
[109] On 20 March 2018 Ms Wilkie answered some of the queries raised by Mr Cole in his email of 5 March and indicated that CLC could seek instructions from the traditional owners about Windbox’s request to grow hay.[136]
[110] On 28 March 2018, Mr Cole emailed Mr Dodd and Mr Vagg using the subject heading “Windbox Pty Ltd – proposed Kalkarindji grazing licence.”[137] He attached a “preliminary draft” of the proposed licence. He suggested they send it to Mr Leslie “so that he could consider whether there are any unusual obligations that arise from the areas in the licence relating to regulatory matters such as the environment in item 9, feral animals and weed control in item 10, property management plan and the like.” Mr Cole identified “key points” including that the term would be five years with an option for a further five years. Another key point related to clause 19 which prohibited assignment of the licence without the prior consent of the land trust. Mr Cole noted that this “is not an absolute right to assign the licence in the event that you wish to sell”.
[111] Later that day Mr Vagg forwarded Mr Cole’s email to Mr Leslie and drew his attention to the assignment clause noting that any assignment would have to be approved by the traditional owners. Mr Vagg said he would ring him that evening “to discuss”.[138]
[112] It seems that even at that stage, even Mr Cole was not aware that Mr Vagg was no longer a director.
[113] Mr Dodd engaged Mr Michael Cann and Ms Sharon Cann as the replacement Station Managers.[139] On 16 April 2018, Mr Dodd emailed Mr Leslie, with a copy to Mr Vagg, telling him that he had appointed Mr Cann as the new Station Manager, and that he would take over between the 25th and 29th April. He requested “a spreadsheet with the updated muster numbers (by paddock by type).” He offered “to pay 1 month’s contract as a bonus if the transition goes smoothly.[140] Mr Leslie replied on 18 April advising that he and Ms Rowbottom would vacate the house on 26th April.[141]
[114] On 24 April 2018, Ms Wilkie emailed Mr Cole, attaching a draft grazing licence for review. Her email stated:[142]

The details for each portion of land remains as set out in my email to you of 19 October 2016, which I have attached for convenience sake to this email. Suffice to say there is enough to get discussions started.

...

I look forward to our discussion on Thursday and to progressing each of these matters.

[115] Mr Leslie and Ms Rowbottom vacated the house on 25 April.[143]
[116] Early on 27 April 2018, Mr Leslie emailed Mr Dodd, Mr Vagg and Mr Christie, stating that:[144]

We have vacated the house and finished Wednesday. We note that your new manager has not arrived yet. This is a concern, as a bore run is due today and you have no staff on the premises to complete one.

I can do a bore run for you today, however you will need to cover the cost of a helicopter and my contracting rate of $400 p/day. Kylie has gone out of way update the income management folder and has also provided your butcher with all current orders for next week.

[117] By email dated 27 April 2018, Ms Wilkie provided Mr Cole with further information about proposed licence fees and permitted number of cattle for each of the paddocks, and responded to some other queries that he had raised with her. She also informed Mr Cole that the CLC had received an application for the three grazing licences from a third party.[145] The identity of the competing applicant was not disclosed. However, Mr Dodd suspected it would have been made by Mr Leslie.[146]
[118] During cross examination Mr Dodd was asked why he did not call Mr Leslie to ask if he was the competing applicant. Mr Dodd replied that he did not do that because he needed Mr Leslie to stay on at the Station.[147] After it was pointed out to Mr Dodd that Mr Leslie and Ms Rowbottom had already vacated the house and were awaiting the arrival of Mr Cann that day, Mr Dodd accepted that his initial explanation may have been false.[148]
[119] Mr and Ms Cann moved onto the property later on 27 April. I reject Mr Cann’s affidavit evidence that he and Mrs Cann arrived at the Station and commenced work there on 23 April 2018[149] and Mrs Cann’s evidence that they arrived on 18 April 2018.[150]

Post 27 April 2018

[120] It seems that Mr Dodd terminated the services of Mr Cole some time between Ms Wilkie’s email of 24 April 2018 and early June. In his email of 13 May (referred to in [98] above) Mr Vagg informed Ms Wilkie that “our company lawyer Graham Cole has told me that he can only take directions from Ray Dodd as he is now the sole director of our compan[151].”151 Ms Wilkie emailed Mr Cole about that on 15 May and rang him on 16 May. Mr Cole told her that he was still taking instructions from Mr Dodd and that Mr Dodd had not contacted him for t[152]e weeks.152
[121] On 4 June 2018 Mr Luke Gardiner, solicitor, wrote to Ms Wilkie advising that he was instructed by Windbox. He said his client “remains desirous of taking up either a renewal of its existing or grant of fresh grazing licences in relation to McDonald’s, Northern and Berta Warta paddocks.”[153]
[122] Meetings of traditional owners took place on 14, 15 and 18 June 2018.[154]
[123] On 25 June 2018, Ms Wilkie emailed Ms Emma Farnell, solicitor for Mr Leslie and Ms Rowbottom, and advised her that the traditional owners of the Berta Warta and McDonald’s Yard paddocks consented to enter into grazing licences with her client but that the traditional owners of the Northern Paddocks did not. That email went on to explain a number of conditions that the traditional owners required.[155]
[124] On 29 June 2018, Ms Wilkie emailed Mr Gardiner and advised him that the traditional owners of the Northern Paddocks consented to enter into a grazing licence with Windbox, but that the traditional owners of the Berta Warta and McDonald’s Yard paddocks did not.[156] The traditional owners of the Northern Paddocks confirmed most of the terms set out in Ms Wilkie’s email to Mr Cole on 19 October 2016 except that they were only prepared to grant a 5 year term, not the 5+5 term previously discussed. The traditional owners also requested that the new managers of Windbox undergo a Northern Territory police / criminal history check and expressed concern that the new managers were appointed to that role without formal notification to the community of the change.
[125] That email also referred in some detail to Windbox’s unsuccessful requests for grazing licences over the Berta Warta and McDonald’s Yard paddocks. It referred to the competing applications for those grazing licences, and advised that the grant of those grazing licences would “need to be approved by the Executive of the CLC after one of the Executive meetings on either 12 July or 8 August 2018.” The email also gave Windbox 90 days to remove the cattle from those two licence areas.
[126] JACT Pastoral Pty Ltd was incorporated on 17 July 2018, with Mr Leslie and Ms Rowbottom as its directors.
[127] On 29 July 2018, DALT executed an authority to the CLC to affix the common seal of DALT to documents required for the purpose of DALT granting grazing licences in respect of McDonald’s Yard and Berta Warta.[157] A meeting of the CLC Executive Committee was held on 8 August 2018.[158] On 18 August 2018, the CLC Executive resolved to give directions to DALT, pursuant to s 19(4A) of ALRA, to grant grazing licences to JACT over McDonald’s Yard and Berta Warta.[159] On 23 August 2018, DALT and the CLC executed a written grazing licence in favour of JACT over McDonald’s Yard.[160] On 29 August 2018, DALT and the CLC executed a written grazing licence in favour of JACT over Berta Warta.[161]
[128] On 24 August 2018, the CLC sent a notice to Windbox purporting to terminate its grazing licences over McDonald’s Yard and Berta Warta. On 6 September 2018, the CLC purported to fix the termination date of Windbox’s grazing licences over:
[129] On 21 September 2018, Windbox sought interlocutory relief. Orders were made by consent.

Credit

[130] Although there was a significant quantity of documentary evidence tendered in this matter much of the case pursued by Windbox involved attacks on the credibility of others and inferences to be drawn following the success of such attacks. The attacks were far and wide, not only directed at Mr Dodd’s co-director Mr Vagg, and the third and fourth defendants Mr Leslie and Ms Rowbottom. They were also directed at Ms Wilkie and Ms McIntosh and other members of the CLC which was accused of engaging in misleading conduct and facilitating Mr Leslie’s breaches of his statutory obligations, and also at traditional owners of the relevant land. The latter included allegations of fraudulent conduct on the part of some of those traditional owners who participated in the meetings that authorised the grant of the JACT grazing licences. In particular Windbox attacked their very important status and recognition as traditional owners of the land despite them being on the CLC’s list of traditional owners, which list was based upon the findings of the Aboriginal Land Commissioner.[162]
[131] In light of the resolution of the litigation between Windbox and the first and second defendants, I do not need to say much more about the attacks on the CLC witnesses and the traditional owners. However, in fairness to those people I feel obliged to say that the evidence before me did not reveal any basis for any adverse findings against any of those people. Ms Wilkie and McIntosh were cross-examined at some length during the hearing, having previously provided detailed affidavits. They were absolutely honest and diligent in all of their dealings in relation to this matter, both in the course of their dealings with Windbox and its directors, station manager and solicitor, and the traditional owners, and also in the course of preparing and giving their evidence. The belated attacks on the traditional owners could not be pursued, following my refusal to give Windbox leave to amend its pleadings to raise those serious allegations on the eve of the trial.[163]
[132] The key people involved in the case ultimately pursued by Windbox were Windbox’s two directors, Mr Dodd and Mr Vagg, Windbox’s solicitor, Mr Cole and the fourth defendant, Mr Leslie.
[133] Mr Vagg was particularly important because he was the director who was responsible for the cattle side of Windbox’s business and the running of the Station, and the director who dealt with Mr Leslie, the traditional owners and the CLC. Mr Cole was particularly important because of instructions he is said to have received from Windbox on or shortly before 29 January 2018. Mr Dodd’s evidence was important for various reasons particularly in relation to what occurred in January 2018, including the fact that he was the person who is said to have given the important instructions to Mr Cole on 29 January.[164]

Mr Dodd

[134] It is clear that Mr Dodd, as the holder of 85% of the shares in Windbox, treated the Company as his own, particularly from about September 2017 when friction began to escalate between him and Mr Vagg. Prior to the meeting on 3 January 2018 Mr Dodd had decided to get out of the business and had found at least one potential buyer.
[135] Unbeknown to Mr Vagg at the time, Mr Dodd removed Mr Vagg as a director on 6 February 2018. It seems that none of Messrs Vagg, Leslie or Cole were aware of this for another few months. Indeed Mr Dodd continued to copy Mr Vagg into emails without any suggestion that he was no longer a director.[165]
[136] From then on Windbox was effectively Mr Dodd. He was the person who gave instructions to bring and pursue this litigation. This included the serious attacks upon the credibility of most of the other people and bodies involved in the granting of the grazing licences. This included Mr Dodd’s sworn allegations that Ms Wilkie and Ms McIntosh had made misleading statements to the traditional owners at the meetings of traditional owners in June 2018.[166] These attacks were either unfounded or abandoned. He must also bear responsibility for Windbox persisting with allegations such as that in [46.1.2] of the FSOC when it was plain that there was no direct evidence in support of that allegation, either from him or Mr Cole.
[137] In their initial written submissions concerning Mr Dodd, counsel for Windbox contended that:

Mr Dodd was plainly a truthful witness who was prepared to make concessions when it was proper to do so. The attempts by the Leslie defendants to attack him over Windbox’s treatment of Mr Leslie went nowhere. An equity opportunity was discussed and offered and not taken up by Mr Leslie.[167] It seems likely that it had something to do with the litigation in which Mr Leslie was involved over the helicopter crash and it is also likely that Mr Leslie did not wish to be adding to his pool of assets if he was at risk of a substantial verdict which might result in his bankruptcy. The evidence of Mr Leslie and Ms Rowbottom that they had been treated badly by Mr Dodd does not warrant a finding that that was indeed the fact. The relevance of the evidence is that Mr Leslie and Ms Rowbottom (no doubt encouraged by Mr Vagg) believed as early as 2017 that they were being treated badly and this provides evidence of motive for Mr Leslie to abuse his position as Station Manager and set about competing with his employer for the grazing licences. Mr Dodd had an understandable sense of grievance in relation to the conduct of Mr Leslie in this regard, however it is very apparent that he was completely unaware of Mr Leslie’s duplicity, and continued to trust and rely on him after 31 January 2018 just as he had in the years prior to that. Moreover, Mr Dodd should be accepted when he said that as far as he was concerned the five year terms of the grazing licences which the traditional owners had indicated in 2016 that they were happy to enter into were a given from that time onwards and that is the way Windbox conducted itself thereafter. [168]

[138] In their written closing submissions counsel for JACT identified some parts of the cross examination of Mr Dodd where he appeared to give different answers at various points to a particular proposition put to him. This included his evidence as to when he first suspected that Mr Leslie had applied for the grazing licences and why it took him so long to take any kind of legal action to prevent CLC and DALT proceeding to consider and later to grant the licences.[169] Mr Dodd stressed that he was a layman, did not know what options he had, and needed a lawyer to tell him what to do. However, he agreed that at all times Windbox did have a lawyer who was involved with the matter, Mr Cole until mid May, then Mr Gardiner.[170]
[139] Counsel also challenged Mr Dodd’s evidence that he “had no inkling that [Mr Leslie] was to be a competitor” when he ceased employment on 31 January 2018.[171] Counsel contended this evidence is inconsistent with Mr Dodd’s evidence that he immediately “completely cut Mr Leslie out of the picture in relation to his dealings with the CLC” and also no longer involved Mr Leslie in any of his email correspondence, particularly the redacted email to Mr Cole of 1 February 2018.[172]
[140] Counsel for JACT also drew attention to significant differences between the Windbox accounts Mr Dodd verified for the purposes of the security for costs application on 19 November 2018[173] and the different accounts he verified for the purposes of the trial itself.[174] One example given was that on 16 November 2018 Mr Dodd deposed to the cattle on the station having a value of between $2.5 million and $3 million, whereas the accounts verified for the purposes of the trial suggest that as at 30 June 2018 the value was only $582,714.22. Counsel also contended that “the accounts also suggest inappropriate accounting of capital to remove wealth from the company otherwise than by the payment of a dividend through an entirely unexplained $1.7 million reduction of a “general reserve”. Despite the notes to the accounts containing detailed comments about matters of far less significance, this unusual feature was unexplained. I note that Mr Dodd said that the decrease in the total current assets from 2017 to 2018 was “a consequence of cash on hand being paid out by Windbox Pty Ltd to its members.”[175]
[141] In their submissions in reply counsel for Windbox contended that the examples given in the JACT submissions show the cross examiner and Mr Dodd not being ad idem or otherwise counsel did not directly challenge Mr Dodd with earlier evidence said to be inconsistent.
[142] Counsel for Windbox also submitted that no inference adverse to Mr Dodd’s credit or Windbox’s case generally can be drawn from a proper claim of legal professional privilege. Whilst this is correct as a general proposition, if a person elects to rely on privilege, that person will often risk not being able to prove a claim.[176] If there is other evidence from which a court may draw an inference as to the content of legal advice, the court may be able to draw the inference on the balance of probabilities in the absence of contrary evidence from the person claiming the privilege.[177]
[143] I share the concerns expressed by counsel for JACT, particularly those relating to Mr Dodd’s reasons for taking no action to prevent the progress of Mr Leslie’s applications, and the apparent differences between what he told the Court in the course of the security for costs application and the accounts produced at trial.
[144] I also find somewhat disingenuous the submission that Mr Dodd “continued to trust and rely on [Mr Leslie] after 31 January 2018 just as he had in the years prior to that.” Not only did Mr Dodd deliberately exclude Mr Leslie from any further dealings concerning the Windbox grazing licences, he had already reached and expressed doubts about Mr Leslie’s honesty in relation to his claim for reimbursement for his equipment, a claim that had been outstanding for many years.[178] I also find disingenuous Windbox’s blaming Mr Leslie for the unsuccessful attempts by him to obtain equity in the Company in 2015, and speculating that it had something to do with litigation that was unrelated, a proposition that was rejected by Mr Leslie in cross examination and never taken any further by Windbox.
[145] I have also expressed concerns about Mr Dodd’s conduct, particularly during the last few weeks of January 2018, elsewhere in these Reasons. See for example his misleading emails to Mr Leslie about not being able to engage Mr Leslie as a contractor,[179] and telling Mr Leslie that “the new owners” must have placed the advertisements for a new Station Manager.[180]
[146] I observed Mr Dodd carefully when he was giving evidence. As Windbox’s counsel pointed out he did make some concessions. However, for the most part they were concessions that he had little choice but to make. I often found him to be discursive and reluctant to answer questions directly. On several occasions after he had been answering a particular question at length he had to be directed back to the question, and on some occasions, at his request, reminded of the question.
[147] I formed the impression that Mr Dodd was an experienced, astute and dominating business operator, particularly in his main area of interest, the hotel industry. Over the years while Mr Leslie and Ms Rowbottom dutifully and faithfully worked for Windbox, he strung them along with empty promises, even after they made their difficult decision on 3 January 2018 to walk away from this important part of their life. His treatment of them, particularly after they had told him of their concerns on 3 January 2018 was arrogant, presumptive and disrespectful of their genuine attempts to continue to do the right thing by Windbox and the Station, even after their resignation.
[148] Where Mr Dodd’s evidence differs from that of Mr Leslie and Ms Rowbottom, I would accept their evidence, not his.

Mr Vagg.

[149] Unfortunately, no evidence was adduced from Mr Vagg. No explanation was given for this omission.
[150] Windbox made serious allegations of impropriety against Mr Vagg, one of its two directors, alleging that he conspired with Mr Leslie inter alia to delay Windbox’s discussions with the CLC and enable Mr Leslie to obtain the grazing licences instead of Windbox. Windbox contended that this conspiracy had been in existence for many months and was evidenced by Mr Vagg sending on to Mr Leslie and Ms Rowbottom emails that he had received from Mr Dodd and a draft of an email he planned to send to Mr Dodd.[181] Counsel for JACT referred to this as the “Vagg conspiracy”.[182] In its written closing submissions Windbox contended that Mr Vagg:
[151] These serious allegations against Mr Vagg were not pleaded, and, as far as I know, he was not made aware of them.
[152] In their submissions responding to those submissions made by Windbox, counsel for JACT contended that the Court should infer that Mr Vagg’s evidence would not have assisted Windbox to prove its case.[188] Counsel stressed Mr Vagg’s important role, both as a director and as the person responsible for Windbox’s operations on the ground. Counsel quoted and referred to a passage from Greenwood J’s reasons in Australian Competition and Consumer Commission v Cement Australia Pty Ltd[189] concerning inferences that could be drawn where a company does not call relevant evidence from one or more of its own directors.[190] In reply, counsel for Windbox contended that a Jones v Dunkel inference should not be drawn against Windbox for two reasons:
[153] Rather, Windbox contended, any adverse inference should be drawn against JACT, because it was they who, according to Windbox, conspired with Mr Vagg to harm Windbox’s interests.
[154] I reject that contention. Notwithstanding that Windbox pleaded a large number of instances of misconduct on the part of Mr Leslie, including his misuse of information, the pleadings did not accuse Mr Vagg of any involvement in any misconduct or in some kind of conspiracy with Mr Leslie (and presumably Ms Rowbottom). I accept that had this been pleaded, the JACT defendants may have made further enquiries, for example of Mr Vagg, and conducted their case differently. Further, acceptance of the kind of contention put by Windbox would wrongly put the onus on JACT to call Mr Vagg. It was Windbox who chose to make these allegations against Mr Vagg and to do so without even pleading them.
[155] The importance of proper pleadings, and giving notice to a person that serious allegations have been made against him of her, was stressed in Bale v Mills[191] applied in Ashby v Slipper.[192] However, as counsel for Windbox pointed out, Ashby v Slipper does not require that a person against whom adverse findings will be sought be given notice, by pleading or otherwise. Moreover, Windbox is not, in these proceedings at least, seeking any relief against Mr Vagg. However, Ashby v Slipper does stand as authority for the proposition that caution should be exercised in drawing adverse inferences against a person who is not a party and therefore has not been heard.
[156] For reasons which later appear, I do not accept that Mr Vagg was part of any conspiracy of the kind alleged.[193] I have no reason to doubt the propriety of his conduct at any material time.

Mr Cole

[157] Mr Cole had been Windbox’s solicitor since about 2009. As company solicitor he was involved in the negotiations with CLC at least since August 2016. These included discussions with Mr Vagg and Ms Wilkie about the “Vagg amendment” from August 2017, and discussions with Mr Dodd and the CLC from February 2018 until he was replaced as the Company’s solicitor by Mr Gardiner in May 2018. According to counsel for Windbox, Mr Cole was also involved in communications with Mr Dodd in January 2018, and in particular receiving instructions on or shortly before 29 January 2018. He was also involved in discussions with Ms Wilkie from early February.
[158] Mr Cole did not give evidence. No explanation was provided for this. However, some parts of his files were disclosed and tendered. Legal professional privilege was claimed and maintained in respect of many of the written communications between him and Windbox’s directors, presumably on the instructions of its major shareholder, Mr Dodd. In some cases, where privilege was waived, there were substantial redactions, in particular to Mr Dodd’s email of 1 February 2018.[194]

Mr Leslie and Ms Rowbottom

[159] Windbox’s case ultimately turned on inferences sought to be drawn, adverse to Mr Leslie and Ms Rowbottom. In particular Windbox relied on communications that Mr Leslie and Ms Rowbottom had with Mr Vagg until early February 2018 (the “Vagg conspiracy”), Mr Leslie’s discussion with Mr Spazzapan on 4 January 2018, and observations made by Mr Cann after Mr Leslie and Ms Rowbottom had left the Station at the end of April. Counsel for Windbox cross-examined Mr Leslie at length, particularly in relation to matters about which Mr Vagg could have been asked, had he been called to testify. The attacks on the credit of Mr Leslie and Ms Rowbottom became a very important part of Windbox’s case.
[160] In their closing written submissions counsel for Windbox submitted, inter alia:

Specifically, his evidence as to how and when he first came to seriously consider making application himself for the grazing licences defies credulity and cannot be reconciled with contemporaneous documents. His explanations were unconvincing to say the least given that he attempted to push all serious consideration by he and his partner of applying for the grazing licences beyond midnight on 31 January 2018 when he was being “backgrounded” through January by Mr Vagg and had approached Mr Spazzapan by 4 January 2018. The 31 January 2018 date does not, in any event, have the legal or factual significance which Mr Leslie seeks to ascribe to it, however his contortions around that date give the lie to the truthfulness of his evidence generally. The move to “contractor” from “employee” was plainly an attempt by Mr Leslie to free himself of the statutory and fiduciary obligations which he owed to Windbox and his persistent refusal to admit this while holding on to the unbelievable story of when he first seriously considered applying for the licences himself is telling against his credit. So, too, is his selective evidence about which emails he received or had brought to his attention in January and February 2018. In his affidavit Mr Leslie claimed not to have recalled seeing a number of emails prior to the preparation of his affidavit. He went as far as saying that he doubted that they had been brought to his attention by Ms Rowbottom. Relevantly and importantly the emails to which this excuse was proffered were all damaging to Mr Leslie and called for an explanation. This necessitated a lengthy cross-examination in relation to these “excuse” emails and their contextual placement with other emails which Mr Leslie either authored, co-authored or admitted having received. That process resulted in Ms Rowbottom conceding that most of the “excuse” emails were most likely brought to Mr Leslie’s attention and Mr Leslie being forced to admit that some of them most probably were as well. To the extent that Mr Leslie attempted to cling on to the “excuse” emails being unfamiliar to him that evidence should be rejected. Most importantly, Mr Leslie was advised by Mr Vagg by email of 1 February 2018 that he (Vagg) had effectively stalled Windbox from finalising the grazing licences in conformity with Mr Dodd’s instructions of 24 and 29 January 2018. It was only shortly after this that Mr Leslie made contact with Ms McIntosh knowing that the documentation of the grazing licences had not been finalised by Windbox and would not be finalised while Vagg’s stalling tactic was operating.[195]

[161] Later, at [155] of their written submissions, counsel for Windbox made submissions about Mr Leslie’s involvement with the Company and his good relationships with the CLC and the traditional owners, which I have generally accepted (at [404]and [405] below). Counsel then made more detailed submissions about the Vagg conspiracy and Mr Dodd’s alleged instructions to Mr Cole in the passage which I have quoted at [406] below. I have rejected those submissions in my consideration of the alleged breaches of s 183(1) of the Corporations Act.
[162] Despite the colourful language used by counsel in the submissions quoted in [160] above, I also reject those submissions, for the reasons stated elsewhere. See my discussion and conclusions on the important issue as to when it was that Mr Leslie planned to apply for the grazin[196]icences,196 the “Vagg conspir[197]”,197 Mr Leslie’s discussions with Mr Spazzapan on 4 Ja[198]ry 2018,198 the frustrations experienced by Mr Leslie and Ms Rowbottom until early February brought about by Mr Dodd’s stonewalling, and Mr Leslie’s reasons for not taking any notice of Mr Dodd’s emails of 24 and 28&#1[199]January.199
[163] Ms Rowbottom’s evidence, including during her cross-examination, was consistent with that of Mr Leslie. Counsel for Windbox identified only two reasons why I should reject her evidence, both of which assumed that I would be rejecting those important parts of Mr Leslie’s evidence. The first reason was that she should not be believed because her evidence as to when she and Mr Leslie gave serious consideration to apply for the grazing licences was consistent with that of Mr Leslie, which itself “defied credulity, and was patently false.” The second reason was that she was “a knowing participant in and contributor to Mr Leslie’s obtaining and use of Windbox’s confidential information “ and she passed on Mr Vagg’s “leaked” emails and discussed them with Mr Leslie. She was a co-conspirator with Mr Leslie and Mr Vagg.[200]
[164] I have rejected those attacks on Mr Leslie’s credibility. To the contrary, Ms Rowbottom’s evidence supports that of Mr Leslie. My observations of Mr Leslie and Ms Rowbottom in the witness box, and during the case generally, left me with a very good impression of their credibility. They were both conscientious and hard workers, trustworthy and honest. They were not particularly sophisticated people. They trusted others, sometimes to their detriment, such as continuing to work with Mr Dodd despite his poor treatment of them.

Mr & Mrs Cann.

[165] Mr and Mrs Cann were placed in a very difficult situation when they were engaged to take over from Mr Leslie and Ms Rowbottom in the circumstances where many unusual things were happening. These included the acrimonious falling out between Mr Dodd and his co-director Mr Vagg, and the strained relationships between Mr Dodd and Mr Leslie and Ms Rowbottom. This was compounded by the fact that Windbox did not have current grazing licences and may not get them, and Mr Dodd might soon be selling out his interest in any event. Moreover, Mr Dodd had not involved Mr Leslie in the process of finding a replacement station manager but had left him and Ms Rowbottom, and their family, in a state of uncertainty as to when and how they would be replaced. An orderly handover was unlikely.
[166] A further and unexpected complication for Mr Cann arose following multiple complaints from early September 2018, including from the CLC, about Windbox’s operations both on the Station and also at Kalkarindji Meatworks. In addition to having to deal with those complaints, Mr Cann was in the awkward position of having to take responsibility for some or all of those matters or finding someone else to blame, namely the previous station manager. I shall discuss this further when considering the misconduct allegations.
[167] An additional difficulty faced by Mr and Mrs Cann is that at the time of the hearing they were still employed by Windbox, and were required and to provide the evidence that formed the basis of the misconduct allegations. Mr Cann’s evidence was also necessary to enable Windbox’s other witnesses, Mr Mobbs and Mr Newsome, to express opinions, also consistent with Windbox’s belated allegations.
[168] One such allegation concerned the presence of botulism in the herd. Despite Mr Cann’s evidence that some cattle were infected with botulism and that Mr Leslie had not inoculated them, evidence upon which Mr Mobbs relied in support of his opinion, Mr Cann did not produce any contemporaneous record of any such observation. Nor did he suggest to Ms McIntosh of the CLC that cattle were suffering from botulism.[201]
[169] Another example is Mr Cann’s affidavit evidence that Mr Leslie failed to provide cattle figures and vehicle records.[202] However, he accepted during cross-examination that those records were in fact held by Windbox’s bookkeeper (in Melbourne). He could not explain why he did not disclose that fact in his affidavit, notwithstanding that when he swore his affidavit he had been the manager of the Station for over eight months.[203]
[170] I do not consider that Mr or Mrs Cann were intentionally misleading either in their observations or with their inferences. However I do think that the reliability of Mr Cann’s evidence in particular was tainted by the various factors that I have mentioned, including the powerful influence of Mr Dodd.

Mr Mobbs.

[171] Windbox also led evidence from an experienced pastoralist, Mr Mobbs, an acquaintance of Mr Dodd's. Mr Mobbs attended the Station on three occasions in 2018 in order to select cattle to be sold. He testified that he observed the presence of botulism in the herd and the absence of botulism vaccinations. He also observed a large number of oversized weaners, many of which were not branded. He opined that those cattle had not been mustered for up to two years.[204] During cross-examination, he was unable to give a satisfactory reason as to why there was no reference to the botulism in his diary.[205]

Inadequate discovery

[172] JACT contended that Windbox failed to disclose relevant and important documents, and that the Court should draw an adverse inference against Windbox. Counsel referred to Katsilis v Broken Hill Pty Co Ltd[206] where Barwick CJ pointed out that adverse inferences can be drawn in cases where a party deliberately fails to produce evidence in circumstances where that party would have appreciated the relevant nature of the evidence.
[173] Counsel referred to the nondisclosure of:
[174] Counsel pointed out that no explanation has been provided for these omissions. On the contrary, Windbox did disclose some of the communications between Mr and Mrs Cann and Mr Dodd when responding to JACT’s applications for security for costs. Further, Windbox chose to disclose some, but not all of Mr Cole’s file. Counsel contended that this suggests deliberate decisions on the part of Windbox to withhold disclosure of important and relevant material.
[175] In response, counsel for Windbox point out that there was no cross-examination of Windbox’s witnesses about the discovery process, nor was there any complaint, contemporaneously or otherwise, about the adequacy of Windbox’s discovery. Counsel also submitted that there is no evidentiary basis to suggest that other documents existed.
[176] I have some difficulty accepting that last contention, particularly in relation to Mr Cole’s file. However, there may well have been valid claims for legal professional privilege in relation to those documents, notwithstanding Windbox’s waiver of privilege in some respects. My reservations about Mr Dodd’s credibility cause me to suspect that the failure to disclose material of the kind identified was deliberate. However, because Mr Dodd was never given the opportunity to answer those allegations I am not satisfied to the relevant standard that the adverse inferences sought by JACT should be drawn.
[177] Accordingly, the only inference that I can and do draw is that there was in fact no undisclosed documentary evidence that further advances the case of either party.

Validity of the JACT grazing licences

[178] Following the resolution of its claims against DALT and CLC, Windbox no longer pursues its contentions against those parties. Those contentions included its claims based in contract and estoppel to the effect that the Windbox grazing licences were still in effect at the time when DALT purported to grant the JACT grazing licences to JACT. The contentions also included assertions of misconduct on the part of CLC when facilitating the grant of the JACT grazing licences.
[179] Notwithstanding those concessions as against DALT and CLC Windbox has not sought to amend its FSOC to withdraw those claims. Rather, Windbox has through its counsel, informed the Court that:

it does not advance any positive case (either by way of evidence or submission) in support of the relief claimed in paragraphs 53.2 (as it concerns the CLC), 53.3, 53.4, 53.5, 53.8, 53.9, 53.10, 53.11, 53.12, 53.13, 53.14, 55, 57, 58, 59 (as it concerns the CLC) and 60 (as it concerns the CLC) of the Fourth Statement of Claim. Windbox also proposes to inform the Judge that it does not advance any positive case in support of paragraphs 53.6 and 53.7 of the Fourth Statement of Claim save that it reserves the right to refer to and distinguish it its Reply Submissions the case of St Alder & Others v Waverley Local Council & Anor [2010] NSWCA 22 (which we contend does not stand for the propositions advanced by the JACT defendants).[207]

[180] In paragraph 53 of the FSOC Windbox sought a number of declarations. These included declarations to the effect that the JACT grazing licences had been entered into contrary to ss 19(4A), (5) and 23 of ALRA, and that:

53.6 the grazing licences executed by Daguragu in favour of JACT as pleaded in paragraphs 32 and 33 above are void and of no legal effect;

53.7 the grazing licences executed by Daguragu in favour of JACT as pleaded in paragraphs 32 and 33 above give no rights to JACT to occupy Berta Warta or McDonald’s Yard and are liable to be set aside on the application of Windbox.

[181] As previously noted, the JACT grazing licences were executed by DALT and CLC on 23 August 2018 (McDonald’s Yard) and 29 August 2018 (Berta Warta). This followed meetings and directions purportedly pursuant to s 19(4A) of ALRA.[208]
[182] The powers and functions of Land Trusts and Land Councils are set out in ALRA. A Land Trust can only exercise its powers as owner of land held by it in accordance with a direction given by the relevant Land Council (s 5(2)), in this case the CLC.
[183] By s 23 of ALRA, the CLC is given statutory functions concerning the management of Aboriginal land including:
[184] The statutory scheme of ALRA is that the Act does not confer on Aboriginal people proprietary interests in the relevant land, or give effect to native title interests, but instead vests fee simple title in a Land Trust that can only act on a direction by a Land Council (s 5(2)) and, before giving a direction, the Land Council is to consult with those Aboriginals who may be affected.[209]
[185] Section 19(1) provides that:

Except as provided by this section or section 19A or 20, a Land Trust must not deal with or dispose of, or agree to deal with or dispose of:

(a) Any estate or interest in land vested in it;
(b) ...
[186] Section 19(4A) provides that:
With the consent, in writing, of the Minister, and at the direction, in writing, of the relevant Land Council, a Land Trust may, subject to subsection (7), grant an estate or interest in the whole, or any part, of the land vested in it to any person for any purpose.
[187] Section 19(5) provides that:
A Land Council shall not give a direction under this section for the grant ... of an estate or interest in land unless the Land Council is satisfied that:
(a) the traditional Aboriginal owners (if any) of that land understand the nature and purpose of the proposed grant ... and, as a group, consent to it;
(b) any Aboriginal community or group that may be affected by the proposed grant ... has been consulted and has had adequate opportunity to express its view to the Land Council; and
(c) ... the terms and conditions on which the grant is to be made are reasonable.
[188] Section 19(6) provides that:
Where a Land Council, in giving a direction for a proposed grant ... of an estate or interest in land, fails to comply with subsection (5), that failure does not invalidate that grant ... unless the person to whom the grant ... was made procured the direction of the Land Council by fraud.
[189] An “estate or interest” in land includes a licence in respect of that land (s 19(11)(a)) and “grant”, in relation to an interest in land, includes the doing of any action by reason of which the interest arises (s 3(1)).
[190] The main allegations originally made by Windbox were that the CLC had not performed its consultation functions. It did not consult the traditional Aboriginal owners of the relevant land or others who might be affected by the proposed grants to JACT, and it did not receive the necessary consent to those grants. Accordingly its purported directions for the grants were invalid because the CLC could not have had the satisfaction required by s 19(5) ALRA.[210]
[191] However, this argument was and is met by the indefeasibility provisions contained in s 19(6). As observed by Kenny J in Gondarra v Minister Families, Housing, Community Services and Indigenous Affairs[211] at [77]:

... s 19(6) expressly preserves the validity of a grant, transfer or surrender of an estate or interest in land if the Land Council fails to comply with s 19(5), unless the person to whom the grant, transfer or surrender was made procured the direction of the Land Council by fraud...

[192] Indefeasibility provisions such as these are similar to those commonly found in Torrens system legislation, and considered in cases such as Bahr v Nicolay (No.2).[212] At p 613, Mason CJ and Dawson J said, in reference to the indefeasibility provisions in the Transfer of Land Act 1893 (WA):

Sections 68 and 134 give expression to and at the same time qualify the principle of indefeasibility of title, which is the foundation of the Torrens System of title. As the Judicial Committee observed in Gibbs v Messer [1891] AC 248 at 254, 'The object is to save persons dealing with registered proprietors from the trouble and expense of going behind the register in order to investigate the history of their author's title and to satisfy themselves of its validity'...

There is no fraud on the part of a registered proprietor in merely acquiring title with notice of an existing unregistered interest, or in taking a transfer with knowledge that its registration will defeat such an interest.

[193] Accordingly, as this Court pointed out in Windbox [No 1] at [35], unless fraud is established, s 19(6) of ALRA operates to preserve the validity of the licences. Windbox failed in its attempts to introduce a fraud claim to engage the exception to s 19(6).
[194] Accordingly, the JACT grazing licences were valid.
[195] I would add in passing that the evidence did not cause me to consider that the CLC did not form the necessary satisfaction contemplated by s 19(5). An important part of Windbox’s case was that certain members of the King family were traditional owners and should have been consulted, and that a number of those who were in fact consulted were not traditional owners. This part of Windbox’s case fell away before the hearings commenced. Windbox then attempted to allege fraud on the part of one of the people consulted by the CLC. Those allegations fell away when the Court refused to allow certain amendments to the statement of claim,[213] and have become irrelevant following the settlement reached between Windbox and DALT and CLC.
[196] In any event the evidence shows that CLC did arrange and conduct several meetings about the proposed grants, on country, with those people who it considered to be the traditional Aboriginal owners of the relevant land. That consideration was largely based upon internal information held by CLC about traditional ownership of that area, including findings made by the Aboriginal Land Commissioner in 1982 and 1985 following the Daguragu Land Claim.[214]
[197] Accordingly, I dismiss the plaintiff’s claims for the declarations sought in paragraphs 53.3, 53.4, 53.5, 53.6 and 53.7.
[198] It also follows from this, and from the fact that Windbox is not pursuing any of its allegations against DALT and CLC, that I should make the orders sought by Windbox in its summons of 16 September 2019, and consented to by DACT and CLC, namely that:
  1. The proceedings brought by the Plaintiff against the First and Second Defendants are dismissed.
  2. The Plaintiff and the First and Second Defendants bear their own costs of and incidental to the proceedings.

[199] It also follows that the issues remaining for me to determine are those concerning breach of statutory duty on the part of JACT.

Breach of Statutory Duty

Windbox’s case

[200] Windbox contended that Mr Leslie was an “officer” of Windbox for the purposes of the Corporations Act 2001 (Cth) (the Corporations Act). As an officer of Windbox, pursuant to s 179 of the Corporations Act, Mr Leslie owed duties to the Company, including:
[201] Section 181(1) of the Corporations Act provides as follows:

A director or other officer of a corporation must exercise their powers and discharge their duties:

(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.
[202] Section 182(1) of the Corporations Act provides as follows:

A director, secretary, other officer or employee of a corporation must not improperly use their position to:

(a) gain an advantage for themselves or someone else; or

(b) cause detriment to the corporation.

[203] Section 183(1) of the Corporations Act provides as follows:

A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:

(a) gain an advantage for themselves or someone else; or

(b) cause detriment to the corporation.

[204] Windbox pleaded that from about 2010 until March 2018 Mr Leslie was intimately involved on behalf of Windbox in negotiations with CLC concerning the renewal of the Windbox grazing licences.[215] It alleged that Mr Leslie:
[205] Windbox alleged that “during 2016, 2017 and 2018, Mr Leslie planned for, took steps to make, and on 2 February 2018 made an application for grazing licences over Northern Paddocks, McDonald’s Yard and Berta Warta.” Windbox was told about that application on 27 April but was not told the identity of the applicant.[216]
[206] Windbox pleaded that “in planning for, taking steps to make and making the competing application for grazing licences over McDonald’s Yard and Berta Warta, Mr Leslie improperly used his position as an officer of Windbox to gain an advantage for himself and Ms Rowbottom and JACT and to cause Windbox detriment, contrary to sections 181 and 182 of the [Corporations Act].”[217]
[207] In FSOC [45.1] Windbox particularised Mr Leslie’s “improper use of position”. Windbox said that:

45.1 For a period of time prior to his resignation from Windbox ... and more particularly from about 2016 Leslie planned for and took steps ... to establish a competing pastoral business including:

45.1.1 Without the knowledge or consent of Windbox, diverting Windbox’s cattle to adjacent Daguragu land and hiding them there pending grant of grazing licences to him in order to use those cattle to establish his own herd;

45.1.2 Failing to adequately tend to Windbox’s stock by not adequately feeding or watering or inoculating, so as to damage and run down that stock;

45.1.3 Overgrazing the Northern Paddocks licensed area in order to enhance the quality of feed on the McDonald’s Yard and Berta Warta licensed areas, being (inter alia) the licensed areas that Leslie intended to make the competing application for and the licensed areas closest to adjacent Daguragu land where he had hidden Windbox cattle as alleged in paragraph 45.1.1 above;

45.1.4 Failing to muster calves and weaners and brand them with Windbox’s brand in a timely manner and in accordance with standard pastoral practice;

45.1.5 Failing to muster and sell fat cows in a timely manner and in accordance with standard pastoral practice;

45.1.6 Permitting a section of approximately half a kilometre of fencing on the northern boundary of McDonald’s Yard at the intersection of Lily Hole and Topsy Bore paddocks to be down thereby enabling cattle to wander from McDonald’s Yard onto adjacent Daguragu land;

45.1.7 In the alternative to paragraph 45.1.6 above, dropping the section of fence referred to in paragraph 45.1.6 and forcing cattle to move onto adjacent Daguragu land by the use of a helicopter;

45.1.8 In the further alternative to paragraphs 45.1.6 and 45.1.7 above, forcing cattle by the use of a helicopter to move through the downed section of fence referred to in paragraph 45.1.6 above and onto adjacent Daguragu land;

45.1.9 Permitting three sections of fencing on the southern boundary of McDonald’s Yard between Mountain Spring and River paddock to be down thereby enabling cattle to wander from McDonald’s Yard onto adjacent Daguragu land;

45.1.10 In the alternative to paragraph 45.1.9 above, dropping some or all of the sections of fence referred to in paragraph 45.1.9 and forcing cattle to move onto adjacent Daguragu land by the use of a helicopter;

45.1.11 In the further alternative to paragraphs 45.1.9 and 45.1.10 above, forcing cattle by the use of a helicopter to move through the downed sections of fence referred to in paragraph 45.1.9 above and onto adjacent Daguragu land

45.1.12 Overordering plant and machinery, with the intention of misappropriating it for his competing pastoral business;

45.1.13 Without authority or approval converting to his own use a large loom of polypipe, the head bale from the main cattle crush at McDonald’s Yard and a calf cradle from Bob’s Gully which items were and remain the property of Windbox;

45.1.14 Ingratiating himself with parts of the local Aboriginal community and denigrating Windbox and Ray Dodd to them;

45.1.15 Failing to keep, maintain or handover station records, such as station diary and waybills;

45.1.16 Refusing to participate in a handover to the new managers;.

45.1.17 Drafting, settling and submitting the competing application to the CLC;

45.1.18 Arranging a quotation for insurance with Arthur J Gallagher;

45.1.19 Contacting and arranging for referees to support the competing application, being Ken Kreinke (Elders, Katherine), Bill and Letty Cook (Suplejack Station), Steve Ellis (CLC), Ian Schubert (Schubert Transport) and Markus Spazzapan (Legal representative); and

45.1.20 Seeking and obtaining advice from an accountant and a taxation lawyer.

[208] For the reasons which I give below, I dismiss the claims of misconduct made in FSOC [45.1.1] to [45.1.14] and I am not satisfied that the conduct alleged in FSOC [45.1.15] to [45.1.16] was misconduct or conduct of the kind that constitutes a breach of the Corporations Act.[218] JACT agrees that Mr Leslie engaged in the conduct alleged in FSOC [45.1.17] to [45.1.20], but point out that that conduct occurred after the cessation of Mr Leslie’s employment on 31 January 2018.
[209] The pleaded claims under s 183 of the Corporations Act against Mr Leslie are in [46] of the FSOC which says:

In planning for, taking steps to make and making the competing application for grazing licences over McDonald's Yard and Berta Warta, Leslie improperly used information obtained while he was an officer of Windbox to gain an advantage for himself and Rowbottom and JACT and to cause Windbox detriment contrary to s 183 of the Corporations Act 2001 (Cth).

[210] Under the heading “Particulars of improper use of information” Windbox alleges that:

46.1 Leslie knew the state of negotiations between Windbox and CLC and Daguragu in relation to the renewal of the Grazing Licences and, in particular that:

46.1.1 the parties had not formalised the terms of their ongoing legal relationship in relation to the Grazing Licences and improperly used this information in order to make the competing application; and

46.1.2 Windbox had by email dated 29 January 2018 instructed its solicitors to formalise the Grazing Licences with CLC and Daguragu on the terms set out in the CLC’s emails.

[211] In their written submissions counsel for Windbox contended that Mr Leslie:
[212] Windbox contends that Mr Leslie breached his statutory duties to the Company in that he:
[213] More specifically, Windbox contends that by reason of his holding the position of Windbox’s Station Manager, as an officer of Windbox and as a consequence of the steady stream of intelligence provided to him by Mr Vagg (in breach of Mr Vagg’s own duties to the Company), Mr Leslie:
[214] Counsel for Windbox relied heavily upon their attack on the credibility of Mr Leslie and Ms Rowbottom, and upon that of Mr Vagg.

JACT Response

[215] In their written submissions of 27 May 2019 counsel for JACT stressed that the claims under ss 181 and 182 are confined to:
[216] They also pointed out that the same particulars are relied upon in [45] of the FSOC as breaches of both sections (181 and 182). The conduct falls into the following categories:
[217] In relation to the second category JACT conceded that very few if any of the relevant facts are disputed. Mr Leslie does not deny that, shortly after terminating his employment with Windbox, he and Ms Rowbottom made an application for the grazing licences on behalf of JACT. Nor does he deny not providing a handover to the new managers.[226]
[218] In this respect, JACT contended that the principal issues for the Court are:
[219] During final submissions on 23 August 2019 counsel for JACT conceded that if Mr Leslie had engaged in the misconduct alleged in any of paragraphs [45.1.15] to [45.1.15] prior to the termination of his employment on 31 January 2018 he would have breached s 182(1). This is because he was then an employee of Windbox. Accordingly, it is unnecessary for this Court to determine whether Mr Leslie also was an “officer” of Windbox during that time.[228] Similarly s 183(1) would potentially apply to Mr Leslie until 31 January 2018 irrespective of whether or not he was also an “officer”.
[220] However, as counsel for Windbox pointed out, s 181(1) does not apply to employees unless they are also officers. There are therefore material consequences if Mr Leslie is found to be an officer in addition to being an employee of Windbox due to his employment in a senior role with significant responsibility.[229] Further, Mr Leslie’s status as an officer between 31 January 2018 and 26 April 2018 is “critical” in relation to the alleged breaches of s 183(1).
[221] It seems that the JACT defendants are not pressing the pleading point referred to [215](a) in above. This is apparent from their concession noted in [230] above.230 In any event, Mr Leslie’s acknowledged status as an employee until 31 January 2018 has always been an important part of[231]ndbox’s case.231

Was Mr Leslie an officer?

Legal principles

[222] Section 9 of the Corporations Act relevantly defines an “officer” of a corporation as including: a person:
[223] As counsel for JACT pointed out, taken literally, the above definitions are extraordinarily wide. At first blush they could cover persons in government (who make decisions affecting a corporation), third party competitors, and most employees (who can significantly affect their employer’s financial standing if they are negligent or fail to carry out their role).
[224] However, as the authorities in this area explain, the definitions are not construed so broadly. They are not directed at any types of decisions which can affect a substantial part of a corporation’s business, or any persons who have the capacity to significantly affect the corporation’s financial standing. Rather, “both of these categories are concerned with identifying persons who are involved in the management of the corporation.”[232]
[225] As Vickery J pointed out in Amcor, the definitions in (b)(i) and (ii) codify the principles stated by Ormiston J in Commissioner for Corporate Affairs v Bracht[233] which focus upon the concept of “management” – namely “the administration of a commercial enterprise” – and those who are involved in the “management of the corporation”.[234]
[226] In ASIC v King, the High Court elaborated that “management” could also involve a situation where:

... a person who has legal rights against a corporation as a counterparty to a particular transaction or particular transactions is able to inveigle himself or herself into the decision-making processes of the corporation by means of the mere threat of the exercise of those rights. In such a case, that person may fall within either or both of para (b)(i) or (ii) of the definition. But that depends on the facts of the case as to the nature and extent of the counterparty's control of, or capacity to control, the corporation's decision-making qua management; it does not depend on the counterparty's legal rights.[235]

[227] Importantly, the “management of the corporation” is distinct from the day-to-day running of the business of a corporation. The “management of the corporation” relates to the formation of policy and decision-making which has a substantial effect upon the business of the corporation. It does not pertain to the day-to-day running of the business of the corporation (such as a restaurant manager).[236] As concluded by Ormiston J in Bracht:

It may be difficult to draw the line in particular cases, but in my opinion the concept of “management” for present purposes comprehends activities which involve policy and decision making, related to the business affairs of a corporation, affecting the corporation as a whole or a substantial part of that corporation, to the extent that the consequences of the formation of those policies or the making of those decisions may have some significant bearing on the financial standing of the corporation or the conduct of its affairs.[237]

[228] So, for example, in both Australian Securities and Investments Commission (ASIC) v Citigroup Global Markets Australia Pty Ltd (No 4)[238] and Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd[239] the court found against the defendants being “officers” notwithstanding that the defendants had capacity to significantly affect the corporation’s financial standing and made decisions which substantially affected the corporation’s business. This was because that capacity to affect was not by reason of the defendants being involved in the management of the corporation in terms of policy formation and significant decision making.[240] As observed by Jacobson J in ASIC v Citigroup (No 4) both of the categories covered by the definition in s 9 are concerned with identifying persons who are involved in management of the corporation.[241]
[229] As counsel pointed out, usually, the persons who are involved in the management of the corporation in the sense of making decisions and forming policies (that substantially affect the business of the corporation or have the capacity to significantly affect its financial standing) are involved in the central management and direction of the corporation’s affairs. However, for very large corporations (unlike Windbox), there may be managerial roles (i.e. policy formation and decision-making) which oversee large discrete divisions of the corporation’s business outside of its centralised management.

Period up to 31 January 2018

[230] Windbox contended[242] that Mr Leslie was an officer of the Company at all relevant times (including beyond 31 January 2018) due to:
[231] Windbox contended[243] that Mr Leslie played an active role in the formation of policy for, and decision-making on behalf of, Windbox. By way of example:
[232] I pause here to note that there are numerous other examples of employees or contractors who would have analogous duties and responsibilities, but who would not fall within the definition of officer as explained in the authorities. Examples would include the manager of a restaurant or hotel, a skilled mechanic who effectively runs a busy motor vehicle service shop, a foreman on a building site, a construction manager employed to manage the construction of a large building or civil works project, and an operations manager. Most of these would have extensive duties and responsibilities, a high degree of autonomy and decision-making responsibility with respect to day-to-day operational matters, financial delegation, and expertise upon which the employer would be heavily reliant. Most would also establish strong and sometimes longstanding relationships – for example with customers, suppliers, public servants (for example, who had authority to grant licences or approvals) and other employees – to enable more efficient operation of the business. In many cases the way in which that person performs his or her duties will have the ability to affect the employer’s financial standing. Whilst each case must depend on its own factual circumstances, I doubt that many people performing those kinds of functions would fall within the definition of “officer” as identified in the authorities.
[233] Mr Leslie’s role since he was employed as “Station Manager” in 2012 was set out in his affidavit of 19 October 2018.[253] As his title implies, his role comprised the wide range of ‘hands on’ tasks of running the Station from day to day. These involved the following tasks:
[234] Mr Leslie performed these tasks under the general supervision and instruction of Mr Vagg who, as between the directors, was responsible for the ‘cattle side’ of Windbox’s affairs.[263] To provide those instructions, Mr Vagg was involved in the Station, visiting around three to five times a year for significant periods of time, and maintaining frequent and lengthy correspondence with Mr Leslie.[264]
[235] Throughout Mr Leslie’s employment with Windbox, he also contracted his helicopter services to other pastoralists in the area, who were operating businesses similar to that of Windbox – Mt Sanford, Wave Hill and Riveren. Mr Leslie spent around five days per month contracting to these competing businesses with the full knowledge and approval of Windbox’s directors.
[236] I agree with JACT that there were important limits on Mr Leslie’s role and authority. It was limited to undertaking the tasks set out in [233] above – that is, physically managing the Station and implementing the directors’ decisions. Limitations on Mr Leslie’s role as employed Station Manager are described in Mr Leslie’s affidavit of 6 [265]ch 2019.265
[237] I accept the submissions put on behalf of JACT regarding the “officer” issue. Mr Leslie was not involved in the Company’s management in the sense of policy formation and significant decision making. He was a manager of himself and some casual staff. His day to day tasks of running the Station involved him frequently making decisions about fixing fences, moving cattle, conducting bore runs and so on. He was also tasked (in accordance with the directors’ instructions) with facilitating cattle sales and the purchasing of stud bulls, and with assisting in negotiations with the CLC and traditional owners.
[238] In my opinion Mr Leslie was not involved in the management of the Windbox “corporation” and was not a “decision maker” of Windbox in the sense contemplated by the authorities. Although his duties involved him spending the Company’s money on common Station supplies and making important decisions about the purchase and sale of cattle, Mr Leslie had no real involvement in Windbox’s financial affairs as such.[266] He was never made aware of Windbox’s financial position,[267] had nothing to do with the bookkeeping and the preparation of Windbox’s accounts or financial reports,[268] and was not a signatory on any Windbox bank accounts (which were controlled by the directors and Windbox’s accounts team in Melbourne[269]).
[239] Nor did he participate in any significant decisions of the company regarding Windbox’s business: for example, whether to apply for a grant or renewal of the grazing licences and, if so, on what terms; whether to expand, contract, or sell the business; whether to expend capital on new equipment and infrastructure; whether to refinance or raise capital; or whether to purchase or rent more land. He did not attend any directors’ meetings or similar where Windbox’s affairs were discussed and where such decisions would have been made.[270] He was simply kept informed of decisions that related to his functions as Station Manager after they were made, and then expected to assist in their implementation as and when instructed. In fact, Mr Vagg would often remind Mr Leslie of his limited role by saying to him words to the effect of: “Zebb. you have to check with Ray and me to get instructions. We are the decision makers and run the company not you”.[271]
[240] Mr Leslie was only authorised to purchase “common station supplies”. To do so, Mr Leslie was given a Windbox credit card initially with a limit of $1,000 which would be automatically topped up monthly.[272] This meant that Mr Leslie only had a maximum amount of $1,000 to spend per month in relation to the common stations supplies[273] and after this he would then have to either:
[241] Because of the difficulties Mr Leslie had in making payments in the above ways, he asked to have a higher credit card limit which was then increased in around 2016 to a monthly limit of $5,000 again topped up monthly. This was generally more than sufficient for Mr Leslie to purchase the common station supplies.[280]
[242] Mr Leslie contracted casual station hands to assist carrying out some of the physical tasks on the Station. However, he did not decide the payment terms as they were simply the NT Cattleman’s Association award rate.[281] Otherwise, Mr Leslie was not authorised to contract labour on Windbox’s behalf. For example, Mr Leslie wanted to hire a cook and other people to assist for general duties and asked the directors on many occasions to make such hires, but they often refused his request.[282]
[243] Mr Leslie did not have authority to make large purchases on behalf of Windbox.[283] In relation to purchasing stud bulls, the directors would discuss potential purchases first and then instruct Mr Leslie to proceed.[284] Mr Dodd accepted that Mr Leslie would approach him first to get approval before committing to pay for the stud bulls. There would be a discussion about whether the purchases were needed, and Mr Leslie would then be “delegated” to buy the bulls.[285]
[244] Clearly, Mr Leslie’s involvement in transactions such as sales and purchases of cattle and other expenditure in relation to the Station would have had an effect upon Windbox’s financial standing. However, it does not necessarily follow that he was an officer of the Company. Decisions of this kind are the kind of decisions that are frequently left to employees at all levels of a business or service as part of their normal duties. Here, Mr Leslie was not authorised to decide to sell off Windbox’s cattle. Rather he discussed each sale program with the directors for their instructions before proceeding.[286] Specifically, Mr Leslie discussed proposed sales of cattle, including the prices on offer, with Mr Vagg to obtain his approval before proceeding. If Mr Vagg did not agree to a proposed sale, he would decline it.[287] Mr Leslie did not have any discretion to determine the sale prices which were determined by the exporters.[288]
[245] Mr Leslie was not permitted to make any significant decisions regarding motor vehicles, accommodation for workers, and other infrastructure and equipment on the Station. Instead, Mr Leslie had to seek approval from the directors. More often than not, the directors did not agree with Mr Leslie’s requests and suggestions. Consequently, the infrastructure and equipment which Leslie thought the Station needed was refused by the directors.[289]
[246] Although Windbox’s directors were heavily reliant upon Mr Leslie’s expertise as a station manager with respect to the operation of the Company’s pastoral business on the grazing licences, Mr Vagg was heavily involved in the operation of the business and did not routinely defer to Mr Leslie’s expertise and recommendations. Rather, Mr Leslie said that Mr Vagg would routinely ignore and refuse to authorise Mr Leslie’s suggestions.[290]
[247] Mr Leslie played an important role in discussions and negotiations with CLC and the traditional owners. The CLC were effectively in control of all of the land held by DALT, including the land the subject of the three grazing licences, and many of the traditional owners lived in or near Kalkarindji. Many of them would have been customers at the Kalkarindji Meatworks. Many of them would have established close friendships with Mr Leslie and Ms Rowbottom and trusted them in all their dealings, including their management of the Station in a way that suited them.
[248] Mr Vagg, and to a lesser extent Mr Dodd, instructed Mr Leslie to assist in Windbox’s various, sometimes half-hearted, attempts to apply for or renew its grazing licences with the CLC.[291] Mr Leslie was happy to assist and help out as instructed.[292] However, Mr Leslie was not permitted to make any substantive decisions regarding the grant or renewal of the grazing licences and was rather used by Mr Vagg (and to a lesser extent Mr Dodd) to assist where he could prove useful – particularly in Windbox’s interactions and communications with the CLC and traditional owners. In this respect, Mr Leslie attended meetings with the traditional owners in August 2016 with Mr Vagg. Because Mr Vagg has significantly impaired hearing and is difficult to understand, Mr Leslie was instructed to give the presentations on Mr Vagg’s behalf.[293]
[249] Moreover, Mr Vagg was quick to reprimand Mr Leslie where he thought that Mr Leslie had taken it upon himself to communicate with the CLC without having instructions from the directors to do so.[294] As Mr Dodd accepted, Mr Leslie was not authorised to communicate with the CLC or traditional owners on any matters of significance unless he had first discussed them with the directors and obtained their approval.[295]
[250] Mr Leslie was not an officer within the meaning of s 9 of the Corporations Act at any time during his employment with Windbox.

Period after 31 January 2018

[251] In relation to the period after 31 January 2018 Windbox contended:[296]

Despite Mr Leslie giving notice of his intention to unilaterally terminate his formal contract of employment, and despite the contractual form—but not the substance—of his engagement by Windbox changing at the end of January 2018, Windbox contends that:

(a) Mr Leslie remained at all times in the position, and having and performing the duties of, the Station Manager; and

(b) Mr Leslie was thereby an officer of Windbox until at least the end of April 2018.

[252] There is no doubt that Mr Leslie’s employment ceased on 31 January 2018.[297] Although he was still the station manager, and his day-to-day activities remained much the same, his functions and responsibilities were reduced from the moment his employment ceased. It follows from my conclusion that he was not an officer of Windbox during the period leading up to then, he certainly was not an officer after that.
[253] From midnight 31 January 2018 until the afternoon of 2 February 2018 there was no formal arrangement in place between Mr Leslie, Ms Rowbottom and Windbox.
[254] Mr Dodd then instructed Mr Leslie to stay on as a contractor for a month, or longer if they agreed, while Mr Dodd found a replacement station manager.[298] This was then confirmed by email correspondence between Mr Dodd and Mr Leslie later that day whereby Mr Dodd accepted Mr Leslie’s and Ms Rowbottom’s “offer to work as contractors from 31 January 2018 to 2 March 2018 or longer if possible.”[299] Mr Leslie agreed to stay on in a short-term contracting role while Windbox arranged for a replacement station manager because it was the “right thing to do” for the cattle. Mr Dodd accepted that Mr Leslie “did the right thing” by staying on as a short-term contractor.[300]
[255] Although Mr Leslie’s role as a contractor was initially agreed to run up to 2 March 2018, he ultimately agreed to stay longer while a replacement station manager was arranged. On 16 April 2018, Mr Dodd informed Mr Leslie that Windbox had appointed a new station manager who would take over between 25 and 29 April 2018 and told Mr Leslie to get his things moved and to inform Mr Dodd when he would vacate the homestead.[301]
[256] Mr Leslie’s role changed significantly once his employment with Windbox terminated on 31 January 2018.[302] As Mr Dodd confirmed:

Whatever relationship you had prior to 31 January with Mr Leslie, it was well and truly finished, wasn’t it? --- It did appear that way.[303]

[257] Previously, as employed station manager, the directors kept Mr Leslie generally informed of their decisions and the future direction of Windbox. The directors involved Mr Leslie in implementing their decisions such as Windbox’s negotiations for new or renewed grazing licences. Further, Mr Leslie made suggestions for improvements to the Station including its infrastructure and equipment.
[258] However, following the cessation of his employment, Mr Leslie ceased having any involvement in Windbox’s affairs – in fact, he was deliberately excluded from them. He ceased having any role or discussions with the directors regarding the plans for the Station, improvements or infrastructure,[304] and he ceased having any involvement in Windbox’s negotiations to apply for or renew the grazing licences.[305] He was not consulted about the selection of a replacement station manager.
[259] On 30 January 2018, Mr Dodd specifically instructed Mr Leslie that he was no longer to send any company correspondence on behalf of Windbox. Correspondence had to be sent via Mr Dodd and “not direct from you.”[306] From this, Mr Leslie correctly understood that once he was a contractor he no longer spoke for Windbox and did not have authority to correspond with those outside of Windbox regarding its affairs.[307]
[260] Mr Leslie’s role as short-term contractor simply involved carrying out the day to day physical tasks on the Station in accordance with both directors’ instructions until a new station manager took over.[308] He felt it necessary to get both directors’ instructions on what they wanted him to do in case they had other plans.[309] Mr Dodd agreed that Mr Leslie needed both of the directors’ instructions during this time.[310] For example, on 16 February 2018, Mr Leslie sent an email to the directors asking:

... What we need to know is, as we have been made aware Windbox is for sale. Do we need to leave cows as long tails for bangtail muster later on if a sale comes along? Also, we would like to know if you want us to make any cattle sales or do you want the numbers on the property for the sale...[311]

[261] As I have already observed,[312] it became increasingly difficult for Mr Leslie to get clear instructions from both the directors on what they wanted him to do with the cattle.[313] During March 2018, Mr Leslie sought instructions to urgently destock and sell cattle given the lack of rain. Mr Vagg confirmed his instructions, however, Mr Dodd only provided qualified instructions to sell “as soon as we get a reasonable price”. As Mr Dodd accepted in cross-examination, his instruction did not actually authorise Mr Leslie to facilitate sales.[314] Ultimately, in around the second half of March 2018, Mr Dodd instructed Mr Leslie to cease mustering and destocking once he had finished up what he was doing, which he did.
[262] Mr Leslie was neither an officer nor an employee after 31 January 2018.

Conclusions so far

[263] Because Mr Leslie was not an “officer” at any relevant time Windbox’s claims based on s 181(1) of the Corporations Act must fail. However, because Mr Leslie was an employee until 31 January 2018 it remains necessary for me to consider the claims under ss 182(1) and 183(1).
[264] In short those sections prohibit an employee, relevantly Mr Leslie, from:

to gain an advantage for himself or someone else, or to cause detriment to Windbox.

When did Mr Leslie “plan” to apply for the grazing licences?

[265] As I have already noted Windbox’s claims are based on its contention that during 2016, 2017 and 2018, Mr Leslie “planned for, took steps to make and on 2 February 2018 made” the competing application for the grazing licences which were eventually granted to JACT.[315] He did these things to gain an advantage for himself and Rowbottom and JACT, and to cause Windbox detriment. He thereby breached:
[266] In short, Windbox contended that Mr Leslie planned for and took steps to make his own application for grazing licences during 2016, 2017 and 2018.[317] On the other hand, JACT contended that Mr Leslie only began to plan and take steps to make the application not long before he actually made it, on 5 March 2018.[318]
[267] Whilst there is some degree of vagueness about the words “plan and take steps”, it is important to consider when it was that Mr Leslie actually made the decision to apply for the grazing licences, and in particular whether he made that decision before the termination of his employment on 31 January 2018.
[268] Windbox concluded its written submissions by contending that:

For some time prior to the end of 2017, Mr Leslie had plans to establish his own pastoral operation.

The failure to muster and brand and the deliberate movement of Windbox’s cattle off the grazing license areas, as evidenced by the later discovery of the 210 male stud cattle, betrays his plans to (unlawfully) start his own herd.

Plans to compete with Windbox formed towards the end of 2017 with the threatened sale of Windbox’s business and Mr Leslie’s inability to obtain any equity in the business.

Mr Leslie’s intentions are manifested in his 4 January 2018 conversation with Mr Spazzapan.[319]

[269] In addition to inferences that Windbox says should be drawn from Mr Leslie’s misconduct alleged in [45.1] of the FSOC, counsel for Windbox referred to and relied on:
[270] Counsel for JACT submitted that Mr Leslie’s evidence, confirmed by Ms Rowbottom, was that the idea of applying for the grazing licences first occurred to him when he had a discussion with Mr Cook on about 12 January 2018.[320] Mr Cook’s account of the conversation is also consistent with the idea being his.[321] This is supported by the fact that until 3 January 2018, Mr Leslie and Ms Rowbottom both held out the chance of becoming shareholders in Windbox. Their decision to resign was made directly after that meeting. Mr Leslie did not give the matter much further thought until he reflected on the effort required to move his family when it looked like he would be leaving the Station after 31 January 2018.[322]
[271] Counsel for JACT also resisted the allegations that Mr Vagg and Mr Leslie participated in some form of improper conduct in order to prevent Windbox from obtaining the grazing licences so that Mr Leslie could apply for and obtain grazing licences.[323]

2016 – 2017

[272] With the possible exception of aspects of [45.1.14] and [45.1.15], none of the evidence supported a conclusion that any of the conduct particularised in FSOC [45.1] occurred before late 2017. I discuss, and dismiss, those allegations of misconduct later in these Reasons. Regardless of whether there were Windbox cattle outside the fences, cattle not branded, or weaners not weaned, it would be an impermissible stretch of the imagination to infer that this was a result of deliberate conduct on the part of Mr Leslie to obtain grazing licences for himself and compete with Windbox.
[273] Despite extensive cross-examination of Mr Leslie about that alleged misconduct, and about his dealings with Messrs Dodd and Vagg during that time, I have no reason to doubt his evidence to the effect that his main desire was to keep working for Windbox as its station manager. He was still anxious to obtain shares in Windbox and to continue to faithfully perform his duties to ensure its success. However, he was justifiably concerned about Mr Dodd’s non-fulfilment of his longstanding promises to give him equity and Mr Dodd’s delays in reimbursing him for his equipment.
[274] These concerns remained after the unsatisfactory meeting in Melbourne on 3 January 2018. It was then that Mr Leslie and Ms Rowbottom decided that they would resign from their employment. Even then, they were willing to remain with Windbox as independent contractors.[324]

4 January 2018 – conversation with Mr Spazzapan

[275] Windbox relied heavily on the telephone conversation between Mr Leslie and Mr Spazzapan on 4 January 2018, and upon Mr Spazzapan’s file note of that conversation.[325] For convenience I have quoted the note again and underlined and italicised some parts:

4/1/18 – ZEBB LESLIE – P/SHIP – TA from ZL on leave at present back in NT next week. One of the partners has been doing $1M dodgy on the other two partners of which he is one. ZL 2% should be 10% the other two $17% and 81%. The 81% partner is the one doing the money dodgy.

Assets are a leasehold over aboriginal land 14,000 head of cattle. Value of $6.2M and 1 ha freehold on which is situated residence and meatworks.

He is the man on the ground, runs the cattle and the meatworks. He is the meat inspector also.

81% partner offered ZL $250k. Not enough for ZL he has put $60k of assets in and wants the value back. Assets now not worth much.

He is currently negotiating with the cattle land owners for new agistment lease. They will not lease it to the P/ship if ZL is not part of the deal. He has the upper hand. He wants to negotiate to get out of the P/ship on best $ he can. Get employed to manage the meatworks and the cattle for 5 yr or until sold. He to retain use of house. He can then negotiate for the cattle land lease and restock. There is no option available but for ZL to be employed to run the meatworks as he is the inspector and the place cannot run unless there is one and getting one in will be virtually impossible. (08:48 to 14:38).

[276] Counsel for Windbox stressed the penultimate sentence: “He can then negotiate for the cattle land lease and restock”. Counsel contended that this is clear evidence of Mr Leslie’s intention already formed, to apply for the grazing licences and restock with his own cattle and then to operate his own business on the land.[326]
[277] Counsel for JACT contended that Mr Spazzapan’s file note supports rather than undermines Mr Leslie’s evidence because:
[278] In relation to the sentence: “He can then negotiate for the cattle land lease and restock” counsel for JACT contended[328] that:

This cannot be a reference to competing for Windbox’s licences whether at that time or at any time in the future:

(a) The new employment agreement he is contemplating with Windbox is in the belief that it is “virtually impossible” for Windbox to run the cattle business on the licences and the meatworks without him;

(b) This employment agreement is to be for 5 years or until sold. That necessarily assumes that the licences are renewed in Windbox’s name, otherwise there would be nothing for him to manage;

(c) The proposed term of the licences was 5 + 5.[329] If Mr Leslie was to leave after “5 years or until sold” (it can fairly be assumed[330]) whichever is earlier, he would not be able to apply for the licences. It could be expected they would have at least 5 years to run and hence would not be available to him;

(d) Accordingly, the words “He can then negotiate for the cattle land lease and restock” should be read as “He can then negotiate for a cattle land lease and restock”, because necessarily he would have to find somewhere else to lease (that is, a cattle land lease somewhere else);

(e) Mr Spazzapan unequivocally confirms this view of the conversation. He specifically denied that Mr Leslie told him that he wished to apply for the “partnership’s” licences.

[279] Counsel for JACT also contended that all of the subsequent correspondence exchanged between Mr Spazzapan and Mr Leslie is consistent with Mr Leslie’ and Ms Rowbottom’s evidence and their position, and is inconsistent with Windbox’s assertions. That subsequent correspondence between Mr Spazzapan and Mr Leslie does not relate or refer to any such intention to apply for the grazing licences (in competition with Windbox).[331]
[280] In response to the JACT contentions set out in [278] above, counsel for Windbox stressed the use of the word “the”, not “a”, in that sentence. Counsel also submitted that Mr Leslie would not necessarily have to find “somewhere else” to lease, nor was it his intention or desire to find “somewhere else”. His special relationship was with the traditional owners who had “the” land, not with traditional owners who owned land “somewhere else”. Counsel also referred to the use of the word “restock”, which implies stocking the same land with his own cattle. Counsel contended that Mr Leslie was positing a scenario whereby he would continue “his association with the Windbox business on ‘the’ grazing licences ‘until sold’, throughout which time he intends to exploit his ‘upper h[332]’.332 Counsel also contended that the correspondence between Mr Leslie and Mr Spazzapan following 4 January 2018 was consistent with Mr Leslie’s stated desire to “get out of the partnership on the best $ he [333].”333
[281] Subsequent to the disclosure of Mr Spazzapan’s file note[334], Mr Spazzapan affirmed an affidavit,[335] and was cross-examined.[336] Mr Spazzapan said, and I accept his evidence, that:
[282] Mr Spazzapan was cross-examined about the file note. He was asked whether he was now able to say that the file note was largely an accurate record of what he was told. He said:

Well, it’s a record ... that Mr Leslie telephoned me. It’s a record that he was having problems with his partners, that there was some impropriety about money, that there was an issue between promises of percentages of the business or otherwise, and a description of how he felt he fitted into the scenes that were transpiring around him and that’s the last paragraph in that note.[345]

[283] When pressed further with the same question, Mr Spazzapan said:

I wrote it, so what I wrote is basically what I understood was going on.

... What I understood I was being told.[346]

[284] Mr Spazzapan was then asked about some particular parts of the note.

Well, it might not have been in exactly those words.

... And it might have been my interpretation of 2 or 3 minutes of conversation. What I’m saying is this is what I noted of what I thought was being – what I was distilling from the conversation.[348]

(c) He was asked about the next sentence: “He has the upper hand.” He said that was a short note which reflected his interpretation of Mr Leslie saying that “he was doing all the work, he knew the country, he did everything and he had the upper hand.” When pressed to state what Mr Leslie actually told him to lead him to the conclusion that Mr Leslie had the upper hand, Mr Spazzapan said:

What he was saying is he knows the country. He runs the helicopter down there. He gets along with Aboriginal people. He knows cattle really well and he knows (inaudible) and he’s just there and basically he said: “Look, I’m the perfect choice of basically being here instead of getting someone else in from the outside to do this.[349]

(d) Mr Spazzapan was asked about the fourth sentence in the last paragraph: “Get out of the partnership on best $ he can”, and the fifth sentence: “Get employed to manage the meatworks and the cattle for 5 years or until sold.” Mr Spazzapan said that Mr Leslie “wanted to somehow disengage from the relationship that he was in, but maintain an income.”[350]
(e) When asked about the words “or until sold” Mr Spazzapan said that Mr Leslie told him that the owners were in the process of selling the enterprise.[351]
(f) Mr Spazzapan was also asked about the penultimate sentence in the last paragraph: “He can then negotiate for the cattle land leased and restock.” Mr Spazzapan said that Mr Leslie needed time to re-establish himself.[352]
[285] In his affidavit Mr Spazzapan also identified at least another 14 documents evidencing approximately 30 communications, mostly by email, between Mr Leslie and Mr Spazzapan, between 7 January 2018 and 2 February 2018.[353] He said that “the first time I recall being aware that Mr Leslie had any intention to apply for grazing licences over the subject properties on his own behalf was when Mr Leslie sent me the email on 7 February 2018.”[354] That email was written by Ms Rowbottom and said:

We have submitted our interest in applying for the grazing licence out here and the CLC require us to list a legal representative. Zebb would like to know if you are able to represent [sic] or can you recommend someone?

[286] During cross-examination Mr Spazzapan was challenged on his assertion in paragraph 12 of his affidavit to the effect that he was never aware of any intention on the part of Mr Leslie to apply for a grazing license over the property on his own behalf until he received the email of 7 February. It was put to him that was inconsistent with the penultimate sentence in the notes of the 4 January telephone conversation: “He can then negotiate for the cattle land lease and restock.” Mr Spazzapan said that Mr Leslie “did not mention to me that he was going to apply or had an intention to apply for the grazing licences where he worked.” When it was put to him that the reference to “the cattle land lease” was a reference by Mr Leslie to the subject lease, Mr Spazzapan said: “It could be any other leasehold that he could acquire in the Northern Territory or anywhere else.” Then occurred the following exchange:

Well, if that was right wouldn’t you have recorded: “He can then negotiate for a cattle land lease?” --- Well, in hindsight, this note should have been two pages long, but it isn’t and I’m ...

You didn’t answer my question. Wouldn’t you have recorded, “He can then negotiate for a cattle land lease and restock” if that was what he told you? --- Maybe yes and maybe no. That is just the way I recorded it, but it didn’t refer back because there was no – not a word uttered by him to me about him applying or trying to get hold of the licences over land on which he was working at the time. He didn’t say that to me.

[287] I reject the plaintiff’s submissions concerning the telephone conversation of 4 January 2018.
[288] If Mr Leslie had said anything to Mr Spazzapan about him applying for the grazing licences on his own behalf, Mr Spazzapan would have noted that then. I have no reason to doubt Mr Spazzapan’s sworn evidence that the first time he heard about any such intention was on 7 February.
[289] It is unlikely that Mr Spazzapan’s notes were accurate, at least word by word, as Windbox’s contentions assume and require, particularly those noted in [280] above. The likelihood of inaccuracy follows not only from Mr Spazzapan’s evidence that it is quite possible that he misinterpreted his handwritten note and / or misunderstood some of what Mr Leslie told him, but also from the many and obvious errors contained in the note itself. For example:
[290] In relation to the last paragraph:
[291] In my view, Mr Leslie was approaching Mr Spazzapan for legal advice about his remedies following the disastrous meeting with Mr Dodd the day before, and his and Ms Rowbottom’s decision to end their employment relationship with Windbox as soon as possible. He wanted Windbox to pay him the money it owed him for the assets of his that he had brought onto the property and applied for the benefit of the Company, and to compensate him for the equity that he had been promised but had never received. He was, nevertheless, keen to continue to manage Windbox’s meatworks and cattle for five years “or until [Windbox was] sold”, and to retain the use of the house where he and his family had been living.
[292] Mr Leslie and Ms Rowbottom were fully aware of Mr Dodd’s statement the day before, that he had lined up an overseas buyer and was “selling and getting out”. Hence their need to consider their future if that eventuated, and to promptly seek legal advice in order to receive the compensation that was due to them and extricate themselves from their employment as soon as possible.

Period to end of January 2018

[293] Windbox contended that Mr Leslie and Ms Rowbottom continued to plan to seek their own grazing licences over the Station during January 2018. Mr Leslie acknowledged that he became aware of that possibility following his discussions with Mr Cook on about 12 January. However, he said that he did not give it any more thought until about 1 February because he wanted to resolve his issues with Messrs Dodd and Vagg before working out what he was going to do.[357] In particular, he was awaiting a response from Mr Dodd to his letters of 7 January and 17 January.
[294] Counsel for Windbox relied heavily on Mr Dodd’s emails of 24 January and 29 January 2018 suggesting that Mr Cole be instructed that Windbox was now prepared to agree to grazing licences with the 5 + 5 year terms proposed by CLC in October 2016. This was the first time that Mr Dodd had expressed any willingness to agree to such short terms.[358] Even then, it seems that he did not make Mr Cole aware of his change of position by the time Mr Cole resumed discussions with Ms Wilkie in February 2018.[359]
[295] I have accepted the evidence of Mr Leslie and Ms Rowbottom to the effect that it is unlikely that Mr Leslie saw these emails or took any notice of them.[360]
[296] Counsel put to Mr Leslie that following his discussion with Mr Cook on about 12 January regarding the possibility of him applying for the grazing licences and his decision to resign from Windbox, it would have been of considerable importance to him that Windbox was about to accept the offer of the 5 + 5 licences. Mr Leslie responded that by then he “was pretty well over the whole deal” and not particularly interested in what was “just something between Bob and Ray.” He said if it meant something to him he is sure he would have remembered it.
[297] Counsel also put to him that he decided that he had to do something quickly, otherwise Windbox would “sign up these licenses” and he would miss out. Mr Leslie responded that if that was the case he would have made his own application the next day. He said that he did not know what Windbox’s situation was with the CLC at that time.[361]
[298] By this time, Mr Leslie had clearly announced his resignation from his position as Station Manager (and that of Ms Rowbottom) to be effective from 31 January 2018 and he was still waiting to hear from Mr Dodd about whether he wanted Mr Leslie to work on the Station as a contractor. All that he had was a copy of Mr Dodd’s email to Mr Vagg, which Mr Vagg had sent him earlier that day, where Mr Dodd was apparently questioning his claim regarding 13 furniture items, referring them to Mr Pearson “to check the legality” and requesting an employment agreement.
[299] Counsel for Windbox also cross examined Mr Leslie about the similar email sent by Mr Dodd on 29 January, headed “FW: Instructions to Graham Cole re CLC Licences.” Counsel put to Mr Leslie that if he had read that email he would have then been aware that the licences had not been finalised between Windbox and the CLC. Mr Leslie replied: “If I’d looked at it that way, I would have been, yes, but I didn’t look at it like that.”[362]
[300] There was no reliable evidence led, either through Mr Dodd or Mr Cole, as to whether and when, if ever, Mr Dodd gave those instructions to Mr Cole. Windbox redacted the whole of Mr Dodd’s email to Mr Cole of 1 February 2018, which was at the top of the email trail bearing the subject heading “Re: Windbox Pty Ltd – pastoral licences at Kalkarindji”.[363] The fact that the text of the email of 29 January 2018 included the words “Hi Graham” and added the additional paragraph and Mr Dodd’s “signature” might suggest that this was a copy of an email that Mr Dodd had already sent to Mr Cole. On the other hand, when Mr Cole spoke with Ms Wilkie on 6 February, he was still advancing the Vagg amendment which he had previously raised with Ms Wilkie in August 2017. Moreover, had Mr Dodd in fact sent those instructions to Mr Cole, one would have expected him to testify that he had done this. Although he gave extensive evidence, he did not give this important evidence. The only evidence about this was Mr Dodd’s evidence in his affidavit that instructions in the terms of his email of 24 January 2018 “were provided to Mr Cole on 29 January 2018.”[364] It is significant to note that he did not say that he provided those instructions to Mr Cole or how and by whom they were provided. Moreover, Mr Dodd’s assertion about this is inconsistent with Mr Cole’s apparent unawareness of any change in his instructions when he re-engaged with Ms Wilkie early in February. I am not satisfied that Mr Dodd gave Mr Cole those instructions on 29 January 2018.
[301] Nor was evidence led as to why Mr Dodd copied his email of 29 January 2018 to Messrs Vagg and Leslie, or as to what they were expected to do with it. There is some force in the submission on behalf of JACT that Mr Dodd was deliberately giving this important information to Mr Leslie in order to prejudice him in the event that he proceeded with his threat to resign on 31 January and to seek compensation for his equipment and the loss of his 2% share.
[302] I accept Mr Leslie’s evidence about his lack of appreciation of these emails of 24 and 28 January 2018. Despite having written to Mr Dodd and Mr Vagg on 7 January and requested their reply by Friday 19 January, and having given them formal notice on 17 January, he had not received any response from Mr Dodd. All that Mr Leslie had received in relation to Mr Dodd’s attitude about that was a copy of Mr Dodd’s email to Mr Vagg of 23 January questioning his honesty[365] and avoiding any discussion about Mr Leslie’s notice that he would be ceasing his employment on 31 January.

Conclusions

[303] The plaintiff has not satisfied me that Mr Leslie and or Ms Rowbottom decided to further explore the possibility of applying for the grazing licences before 1 February 2018. Until then they were preoccupied with their uncertainty about their position with Mr Dodd and also with operating the Station business until the termination of their employment, on 31 January.
[304] Mr Leslie (and Ms Rowbottom) did not take any steps towards applying for the grazing licences and thus establishing a competing pastoral business prior to Mr Leslie’s resignation from Windbox. The plaintiff has not established the allegations particularised in FSOC [45]. The first step taken by them occurred on 2 February 2018 when Mr Leslie telephoned Ms McIntosh to enquire whether he and Ms Rowbottom could apply for the grazing licences. Even then, they merely lodged expressions of interest.[366] It was only after Mr Leslie had spoken to Ms McIntosh that Mr Leslie and Ms Rowbottom decided to apply for the grazing licences. They then set about proceeding with the application. This included them obtaining and completing a CLC Pastoral Proposal form, engaging Mr Spazzapan, contacting an insurance broker, identifying referees and drafting a business plan. They lodged their application on 5 March.[367]
[305] Further, prior to 1 February 2018, Mr Leslie would not have been aware of what instructions, if any, Mr Cole had actually been given or what communications, if any, had occurred between Mr Cole and the CLC. Hence, his telephone inquiry of Ms McIntosh on 2 February 2018. There was nothing said during that call that suggests Mr Leslie had any such knowledge by then.
[306] Mr Leslie was fully aware of Mr Dodd’s intentions to sell his interests in Windbox in the near future. Once it became clear to him that Mr Dodd was not willing to fulfil his earlier promises of equity and or compensation, and was only prepared to keep him on as a contractor for a short term, Mr Leslie had no choice but to advance his own interests after 31 January.
[307] I also reject Windbox’s allegations of a conspiracy between Mr Vagg and Mr Leslie (“the Vagg conspiracy”). Mr Vagg was the director who was primarily responsible for the operation of the business and had frequent contact with Mr Leslie and Ms Rowbottom. He was also concerned to do the best he could in the interests of the Company (in which he held 15% of the shares). This is evident from his conduct such as suggesting the “Vagg amendment”, and convincing the CLC to arrange meetings in October 2017 to consider that suggestion.
[308] Mr Vagg recognised the importance to the business of properly looking after Mr Leslie and Ms Rowbottom so that they would continue working with Windbox. Clearly, and understandably, he was very embarrassed about Mr Dodd’s unsatisfactory treatment of Mr Leslie and Ms Rowbottom, going back to some years before 2015 when Mr Dodd had first promised them equity in the Company. It was clearly in Mr Vagg’s interests, and in Windbox’s interests, for Mr Leslie and Ms Rowbottom to continue working for Windbox. Hence, his suggestion that they attend the meeting on 3 January 2018 in Melbourne.
[309] Mr Vagg’s embarrassment about how Mr Dodd was treating Mr Leslie and Ms Rowbottom would have continued towards the end of January 2018. By then it was clear that Mr Dodd was still avoiding those issues for Mr Leslie and Ms Rowbottom that were obviously important to them. The resolution of those issues was becoming more urgent in light of their clear decision to end their employment as at 31 January and Mr Dodd’s intention to sell out of Windbox. Mr Vagg was well within his rights to pass on communications he had with Mr Dodd concerning their differing views on important issues that would affect Mr Leslie’s prospects of being given what he had been promised. At one point, Mr Vagg told Mr Leslie that Mr Dodd had shared his private email with Mr Pearson. This implies that he thought that he was well within his rights to pass on to Mr Leslie information that he had received from Mr Dodd.
[310] It is important to note that there is no evidence to suggest that Mr Vagg knew of any intention on Mr Leslie’s part to apply for the grazing licences. Also relevant is the fact there is no evidence of Mr Vagg passing on to Mr Leslie or Ms Rowbottom, Mr Dodd’s critical (redacted and presumably privileged) email to Mr Cole of 1 February 2018, or any other document referring to instructions given (or not given) to Mr Cole at about that time. Nor is there any evidence to suggest that Mr Vagg had anything to gain by conspiring with Mr Leslie, for example by providing him with the information, or by stalling Windbox’s negotiations, or by enabling Mr Leslie to “jump the gun” on Windbox’s application. Rather, it was still in his interests that Windbox, not Leslie, get the licences.
[311] Also consistent with the absence of a conspiracy is the absence of any evidence of Mr Leslie responding to the emails that Mr Vagg sent him. Rather Mr Leslie told Mr Vagg that he was no longer interested in Windbox’s business and was sick of being strung along. Further, there is no evidence that Mr Leslie was asking Mr Vagg to send him any of that information. Also, as I have noted elsewhere, even Mr Dodd sent him the email of 29 January 2018, unsolicited and for no apparent reason.

Misconduct allegations

[312] Paragraph [45] of the FSOC accuses Mr Leslie of improperly using his position as an officer of Windbox to gain an advantage for himself and Ms Rowbottom and JACT and to cause Windbox detriment. He is said to have done this by “planning for, taking steps to make, and making the competing application for grazing licences over McDonald’s Yard and Berta Warta”.
[313] Under the sub-heading “Particulars of improper use of position”, Windbox contends that for a period of time prior to his resignation “and more particularly from about 2016”, Mr Leslie “planned for and took steps ... to establish a competing pastoral business”.[368] He did that by engaging in the misconduct referred to in [204] above. For the most part these allegations are that Mr Leslie deliberately and dishonestly, and in many cases criminally, ran down Windbox’s business by stealing cattle, destroying fences and engaging in other nefarious acts.
[314] Allegations of criminal conduct such as some of that pleaded against Mr Leslie in particular, attract the Briginshaw requirements of proof set out in s 140(2)(c) of the Evidence (National Uniform Legislation) Act (NT). JACT submitted that Windbox has not established any of these serious allegations to that, or any standard. They advanced a number of reasons.
[315] Firstly, no direct evidence was led as to the occurrence of these acts. Most of Windbox’s evidence came from Mr Cann and from others who expressed opinions largely based on Mr Cann’s evidence. Mr Cann first worked on the Northern Paddocks area with the assistance of six young indigenous men who lived in the area. In early June he moved to the south of the Station to muster McDonald’s Yard over the next six weeks or so. It was there that he observed that about half a kilometre of fencing was down. He had previously noticed that some fences were down in that area when he drove around the property to locate waters and to get an idea of where the cattle were.[369]
[316] As counsel for JACT pointed out, the scale of the alleged acts is significant. It involved, for example, the theft of hundreds of head of cattle belonging to Windbox, including by the use of a helicopter, the deliberate mistreatment of hundreds of head of cattle, and the destruction of half a kilometre of fencing by Mr Leslie over a two year period. None of this could have happened in secret and remained so. Rather one would expect other people to have seen evidence of one or more of these acts at about the times when the conduct is said to have occurred. Such other people would include other users of the land or nearby land such as traditional owners and the six young indigenous men who later assisted Mr Cann, and CLC inspectors such as Ms McIntosh, or Mr Vagg. For example, one might expect evidence that a fence was standing one day and down soon after. Further, Windbox did not produce a witness who could testify to Mr Leslie’s possession of the spoils of these alleged crimes, or a witness or document observing or recording the sale by Mr Leslie in his own right of cattle which could only have come from the Station.
[317] Accordingly, Windbox was left with the burden of proving each of these serious allegations through circumstantial evidence only. JACT pointed to the failures on Windbox’s part to adduce evidence of the kind noted above, and to a number of inconsistencies between the allegations and the evidence adduced, as leading to the opposite conclusion.
[318] As I have noted, Mr Vagg was the director of Windbox who had the primary hands-on responsibility for the cattle operations. He visited the Station regularly and for days at a time, and was the director who had most of the dealings with Mr Leslie. As I have also noted, he was not called to give evidence. I can only infer that he would not have given evidence that supported Windbox’s allegations of misconduct on the part of Mr Leslie. Rather, the evidence points to him and Mr Dodd being quite satisfied about Mr Leslie’s conduct throughout, at least until late January 2018 when Mr Dodd suggested to Mr Vagg that Mr Leslie was dishonestly seeking payment for some equipment that was not his.
[319] Mr Dodd confirmed that Mr Vagg reported to him from time to time that Mr Leslie was doing “a pretty good job[370] and said the same in effect to the CLC.[371] Mr Dodd agreed[372] with an opinion expressed in an email of 23 August 2017 by Mr Vagg’s accountant, Mr Murphy that:

Zeb & Kylie as on site managers were crucial to the ongoing success of the venture and need to be locked into a certain future with the business.[373]

[320] Similarly, Windbox’s own evidence confirms that on 4 August 2017, the CLC advised Windbox’s lawyer, Mr Cole, that “the traditional owners are eager to continue their good relationship with the company and in particular with Zebb Lesley (sic)...”.[374] This is also inconsistent with Windbox’s contentions that Mr Leslie was running down the business.
[321] Much of the conduct alleged would also have in breach of Windbox’s licences with the CLC[375]. However, there is no evidence of any complaint by the traditional owners, by the CLC, by Windbox’s directors or by anyone else about Mr Leslie’s conduct. There were at least 6 indigenous young men who were resident in and around Daguragu engaged by Mr Cann soon after he commenced in late April. None of them, nor any other local, were called to give evidence about any of this alleged misconduct. Ms McIntosh described Mr Leslie as a “very good manager” whose “cattle management skills” were impressive.[376] When she inspected the stock when Mr Leslie was managing the Station she did not observe any evidence of mismanagement.[377] In her opinion, Mr Leslie was not responsible for the issues she observed on the Station in September 2018.[378]
[322] This too is inconsistent with the allegation that Mr Leslie was deliberately running down the business.
[323] Another inconsistency between Windbox’s allegations and Mr Leslie having engaged in the conduct alleged is the fact that until the meeting of 3 January 2018, Mr Leslie and Ms Rowbottom had hoped to acquire an interest in Windbox’s business.[379] Mr Dodd largely accepted as correct the accounts given by Mr Leslie and Ms Rowbottom in their email of 30 September 2015 which recorded the basis on which they sought an interest in Windbox.[380] Those negotiations continued until 3 January 2018.[381] Not only was it in their interests to see Windbox obtain fresh grazing licences, it was also in their interests for the business to continue to operate profitably.
[324] Another odd thing about these claims is the fact that they were made somewhat late, some considerable time after Mr Leslie ceased working on the Station. Prior to that the only complaint of any misconduct on the part of Mr Leslie was Mr Dodd’s suggestions to Mr Vagg on 23 and 30 January 2018 that Mr Leslie did not own all of the equipment that he was seeking reimbursement for.[382] As I have said, Mr Dodd never put this allegation to Mr Leslie. Rather, he seemed to be using that allegation as a further delaying tactic towards the end of January. Moreover, notwithstanding that allegation, Mr Dodd continued to engage Mr Leslie until late April 2018 until Mr Cann commenced. Indeed, Mr Dodd acknowledged that during that period Mr Leslie continued to do “the right thing” both for the company and the property.[383] Similarly, Mr Newsome agreed that Mr Leslie displayed “competence” and “dedication” in his management of the Station during the period February to April 2018.
[325] Mr Cann’s allegations only emerged after there were multiple complaints about Windbox’s operations both on the Station and also of Kalkarindji Meatworks.[384] These included serious complaints and enquiries from about 12 September including:
[326] Further, these claims were not pleaded until 2 November 2018 when Windbox amended its statement of claim. They were not raised in the original statement of claim – endorsed on the writ dated 27 September 2018 – although it contained a detailed pleading alleging breaches of duty by Mr Leslie for making a competing application in breach of his duties as an officer. Nor were these claims alleged during the hearing of the injunction proceedings on 19 October 2018. The affidavit evidence in support filed by Windbox was extensive. Even though Mr and Mrs Cann had been on the Station for about five months, there was no suggestion that Mr Leslie had engaged in the criminal misconduct now alleged against him. No explanation was provided to explain why these very serious allegations were not included in that material, and were not the subject of the initial pleadings.
[327] Moreover, in October or November 2018, Mr Cann reported to Mr Dodd that “the general condition of the herd overall is reasonable to good” and that the business operations of Windbox were “operating without issue”[388]. Mr Dodd repeated this in his affidavit of 16 November 2018.[389] That is quite at odds with the suggestion that by this stage Mr Cann had detected the deliberate, criminal acts of Mr Leslie in damaging or stealing cattle and in degrading paddocks and infrastructure. Given that Mr Leslie left the Station at the end of April 2018, if that had occurred it would have been obvious to Mr Cann by October/November 2018.
[328] Counsel for JACT submitted that the allegations against Mr Leslie were fabricated by Mr Cann and Mr Dodd in order to deflect criticism of them for their own misconduct, which I have summarised in [325] above. There is considerable force in that submission.

Specific allegations

[329] As I have said, these allegations, some of which go back to early 2016, were not raised until November 2018, some 6 months after Mr Leslie and Ms Rowbottom had left the property. Particulars as to dates and detail were vague, thus making it difficult for Mr Leslie to inspect the property himself and defend the allegations. Moreover, as I have concluded, Mr Leslie did not make a definite decision to apply for grazing licences himself until 2 February 2018. He only began to consider the possibility of getting another job or establishing his own business after the meeting of 3 January 2018.
[330] [45.1.1] of the FSOC alleges that Mr Leslie, without the knowledge or consent of Windbox, diverted Windbox's cattle to adjacent Daguragu land and hid them there pending the grant of grazing licences to him in order to use those cattle to establish his own herd. Windbox has not identified when, during that period of more than two years since early 2016, Mr Leslie is said to have done that.
[331] There is no credible evidence circumstantial or otherwise that Mr Leslie stole Windbox cattle and then hid them in neighbouring land pending the grant of grazing licences. The evidence relied upon by Windbox is Mr Cann’s evidence that cattle must have been deliberately driven from McDonald’s Yard by Mr Leslie, because when Mr Cann flew a helicopter over cattle, they moved away from the Station. That was a very flimsy inference and was not supported by Windbox’s own expert, Mr Newsome.[390] Further, as Mr Leslie explained, such allegations do not make sense and are not plausible, because the areas where he supposedly hid the cattle cannot actually support them.[391]
[332] [45.1.2] of the FSOC alleges that Mr Leslie failed to adequately tend to Windbox's stock by not adequately feeding or watering or inoculating them, so as to damage and run down the stock. Mr Dodd was not able to explain the inconsistency between the figures in [17] of his affidavit (Ex P5) in relation to purchases of vaccinations which suggested that expenditure was much less in 2018 than in 2017, and the figures in Windbox’s accounts which showed an increase in expenditure on animal health from $41,000 to $57,000 from 2017 and 2018 financial years (in Ex P5, p.17).[392] The accounting information which he said supports [17] was not produced.
[333] At no stage prior to April 2018 did Mr Vagg ever refer to botulism in his discussions with Mr Dodd.[393] Mr Leslie said that there was never any outbreak of botulism while he was at the Station and that the first he has ever heard of this was when he read Mr Cann’s affidavit.[394]
[334] Much was made by Windbox’s expert witnesses about the lack of noticeable lumps on the neck of the cattle. However, as Mr Leslie outlined in some detail, he followed a strict vaccination regime and all cattle that were immunised were bangtailed.[395] Mr Leslie further explained that if the vaccination needle is kept clean, the vaccination area does not become infected and no long-term lump forms. For the very few cattle that Mr Leslie did see with an infected lump, he would lance the lump with a scalpel.[396] I accept that evidence.
[335] [45.1.3] of the FSOC alleges that Mr Leslie overgrazed the Northern Paddocks licensed area in order to enhance the quality of feed on the McDonald's Yard and Berta Warta licensed areas, being (inter alia) the licensed areas that Leslie intended to make the competing application for and the licensed areas closest to adjacent Daguragu land where he had hidden Windbox cattle as alleged in paragraph [45.1.1].
[336] As I have said elsewhere, I am not satisfied that Mr Leslie decided to apply for the grazing licences until about 2 February 2018, let alone to engage in conduct such as that now alleged with that in mind. Indeed, when Mr Leslie applied for the grazing licences, he would not have foreseen that he would be awarded McDonald’s Yard and Berta Warta but not Northern Paddocks.
[337] Further, as confirmed by Mr Newsome, the condition of the paddocks in late 2018 is explained by the poor season and Windbox’s decision to defer mustering from early 2018 until mid to late 2018.[397] I have previously referred to Mr Leslie’s concerns about this in March and Mr Dodd’s failure to authorise appropriate destocking.
[338] [45.1.4] of the FSOC alleges that Mr Leslie failed to muster calves and weaners and brand them with Windbox's brand in a timely manner and in accordance with standard pastoral practice. Mr Newsome’s evidence as to the age of the animals in the photograph attached to Mr Mobb’s affidavit was to the effect that the age of the heifers may be explained by the fact that they were not mustered between April and June 2018.[398] This too is fatal to this complaint and is consistent with Mr Leslie’s evidence.[399]
[339] [45.1.5] of the FSOC alleges that Mr Leslie failed to muster and sell fat cows in a timely manner and in accordance with standard pastoral practice. This allegation is also explained by Mr Leslie’s mustering schedule and Mr Dodd’s instruction to Mr Leslie to cease mustering. This resulted in an extended delay while Mr Cann took over and then resumed mustering and processing the cattle.
[340] [45.1.6] to [45.1.11] of the FSOC allege that Mr Leslie permitted sections of fencing to be down so as to enable cattle to wander onto adjacent land, or alternatively dropped sections of fencing and moved cattle onto adjacent land with the use of a helicopter.
[341] In particular, Windbox says that Mr Leslie permitted a section of approximately half a kilometre of fencing on the northern boundary of McDonald's Yard, at the intersection of Lily Hole and Topsy Bore paddocks, to be down thereby enabling cattle to wander from McDonald's Yard onto adjacent Daguragu land. Mr Cann said that he observed those fences to be down and cattle on the adjacent land during his initial inspection of the property shortly after he arrived on 23 April 2018. However, he did not commence mustering in that area until the first week of June.[400] He also said that a station manager should check fences at least once every two weeks.[401] If he had been doing this he would have noticed the fences down earlier, if they had in fact been down during Mr Leslie’s time there.
[342] Mr Leslie denied these allegations. He pointed out that Mr Dodd, Mr Vagg and their advisors attended the Station in the first two weeks of April 2018 for the purposes of inspecting the infrastructure and cattle on the Station, but there was no suggestion then that any fences needed repairing.[402]
[343] There are many reasons why Mr Cann may have found fences down. Mr Newsome accepted that local indigenous people may have pulled fences down to find and take a “killer”, feral animals may have pulled fences down, and water damage could have the same effect.[403] I see no reason not to accept Mr Leslie’s evidence that during his time on the Station he had in place a thorough system of checking fences and that he followed that system. Indeed his ready access to and use of his helicopter including to do mustering work on nearby properties provided him with additional opportunity to keep an eye on the Station’s fence-lines. I accept his evidence that there were no fences down at the time he left the Station.[404]
[344] [45.1.12] of the FSOC alleges that Mr Leslie over-ordered plant and machinery, with the intention of misappropriating it for his competing pastoral business. Mr Dodd listed a number of items said to be missing from a depreciation schedule prepared on the change-over to Mr Cann. I accept Mr Leslie’s evidence regarding the supposedly stolen items. The second-hand horse truck and the Hallmark Livestock Trailer 1990 were not on the Station when Mr Leslie began working there. The Hatz genset broke down because it was so old and Windbox purchased a new Yanmah genset which was at Berta Warta when Mr Leslie left the property. Mr Dodd was present on the Station when the old genset was deemed unserviceable. The second-hand Massey Ferguson Tractor never worked and was scrapped following discussion with and agreement of Mr Dodd. The other items were left on the Station when Mr Leslie and Ms Rowbottom left.
[345] [45.1.13] of the FSOC alleges that Mr Leslie wrongfully converted to his own use a large loom of poly-pipe, the head bale from the main cattle crush at McDonald's Yard and a calf cradle from Bob's Gully which items were and remain the property of Windbox. I accept Mr Leslie’s evidence that the poly-pipe purchased from Elders on Windbox’s account was used to construct a new pipeline at McDonald’s Yard,[405] the head bale was beyond repair and is located in a pile of scrap metal in the shed at McDonald’s Yard (such that Mr Leslie had to use his own head bale on the Station)[406] and the calf cradle was at McDonald’s Yard when Mr Leslie stopped working at the Station (and that he used his own calf cradle on the Station).[407]
[346] [45.1.14] of the FSOC alleges that Mr Leslie ingratiated himself with some members of the local Aboriginal community and denigrated Windbox and Ray Dodd to them. Clearly, Mr Leslie established good relationships with the local Aboriginal community, both before and during his time on the Station. He had a far better knowledge and understanding of the local community and their preferences than either of the directors of Windbox, particularly Mr Dodd. Conversely they trusted him to do the right thing by them in his capacity as Station Manager for Windbox. There is no credible evidence that Mr Leslie denigrated Windbox or Mr Dodd to the local community.
[347] I am not satisfied that any of the allegations of misconduct set out in [45.1.1] to [45.1.14] have been made out.
[348] [45.1.15] of the FSOC alleges that Mr Leslie failed to keep, maintain or hand over Station records, such as a station diary and waybills. Although it is common practice for a station diary to be maintained for large cattle stations, there was no requirement for Mr Leslie to keep a station diary.[408] The Station records were provided to Windbox or left in the appropriate place at the Station.[409] Further, no-one ever requested Mr Leslie or Ms Rowbottom for the records which Mr and Mrs Cann later said they needed and expected to be provided.[410]
[349] [45.1.16] of the FSOC alleges that Mr Leslie refused to participate in a handover to the incoming station manager, Mr Cann. Mr Leslie does not dispute this but points out that there was no requirement for him to do this. This is clear from Mr Dodd’s offer to pay Mr Leslie for an additional month if he did so assist, an offer which Mr Leslie did not take up. He had been kept in the dark about the engagement of the new manager, including when the new manager would be assuming the responsibilities which Mr Leslie had been undertaking during almost four months of uncertainty and acrimony created by Mr Dodd. It is hardly surprising that Mr Leslie was not willing to assist him.
[350] I am not satisfied that the conduct alleged in either [45.1.15] or [14.1.16] was misconduct by Mr Leslie (or Ms Rowbottom), or conduct of the kind that constitutes a breach of relevant provisions of the Corporations Act.
[351] [45.1.17] to [45.1.20] of the FSOC refer to Mr Leslie’s admitted conduct of preparing and submitting the applications for the JACT grazing licences, and other associated conduct including arranging insurance, contacting and arranging for referees to support the JACT applications and obtaining legal advice. Paragraphs [41] and [46.1] of the FSOC accuse Mr Leslie of other misconduct in relation to him seeking and obtaining those grazing licences.[411] I shall deal with those allegations shortly.

Sections 182(1) and 183(1)

[352] An important starting point when considering possible breaches of any of these statutory provisions, including s 181, is the contract or other arrangement that identifies the functions, duties and responsibilities of the officer or employee as the case may be. Also relevant will be common law and equitable obligations.
[353] Windbox did not inform Mr Leslie, let alone seek or obtain his agreement, that he was in the possession of any particular information that Windbox considered confidential which he was required to keep secret post-employment. Indeed, Windbox has not alleged that Mr Leslie breached any implied contractual obligation or equitable obligation of confidence owed by an employee to his employer post employment.
[354] With some exceptions, for example the wrongful disclosure of trade secrets, an ex-employee is entitled to make full use of the skill, experience and “know-how” which he or she has acquired as a result of the previous employment. This includes using it in legitimate competition with a former employer.[412]
[355] Sections 181, 182 and 183 of the Corporations Act have not expanded the duties of officers and employees in any significant respect. However, they may have expanded the categories of persons who are subject to particular duties, and clarified the content of particular duties. Nor do they qualify an employee’s right under the common law to compete against his or her former employer absent a contractually binding agreement to the contrary. Allegations of breaches of these sections have been considered and determined in light of, and consistent with, those common law rights.
[356] Counsel for JACT referred to the decision of Jessup J in Links Golf Tasmania Pty Ltd v Sattler.[413] That case concerned the actions taken by Mr Sattler to develop a golf course on land which he owned adjacent to a golf course operated by Links Golf Tasmania Pty Ltd. He was a director of that company and its CEO at that time, but his actions were not undertaken in either capacity.
[357] Jessup J noted that the concept of impropriety for the purposes of ss 181(1)(b), 182(1) and 183(1) does not mark out a “new jurisdictional ground” beyond what the law of equity already imposes in relation to the duties of fiduciaries.[414] See too Amcor at [1337] concerning s 181(1), Del Casale v Artedomus (Aust) Pty Ltd[415] at [59] – [60] concerning s 183, and Manildra Laboratories v Campbell[416] at [130] – [133] concerning ss 182 and 183.
[358] In Manildra Laboratories McDougall J referred to what Hodgson JA had said at [60] of Del Casale, and said:

131 It will be seen that each section effectively reflects a fiduciary obligation under the general law. The key concept in each section is that of improper use.

...

133 Since I have found that there was no breach of fiduciary duty, and no breach of contract in relation to confidential information, it follows that there was no contravention of ss 182 or 183.

[359] In Links Golf, Jessup J held, at [702]:

When he decided to proceed in the way indicated, Sattler was not exercising any power or discharging any duty as an officer of LGT within the meaning of s 181; he was not using his position as an officer of LGT, and was not acting improperly, within the meaning of s 182; and was not improperly using information which he obtained because he was an officer of LGT within the meaning of s 183.

[360] In Amcor, Vickery J held that the conduct of the defendants, although they used and took advantage of information they gained in the course of their employment, did not involve them misusing their positions as such. Accordingly, they did not breach s 182.[417]
[361] In Manildra Laboratories, McDougall J considered and agreed with two points:
[362] In relation to the first point his Honour said, at [83]:

In this case, it is not sufficient to say that Mr Campbell breached his fiduciary or contractual obligations to Manildra simply because, during the currency of his employment, he took steps to set up a business that would, after the termination of his employment, compete with Manildra. It is necessary to look at the steps that he took to see whether any of them involved a breach of obligation.

[363] Sections 182(1) and 183(1) apply to a person’s improper use of his position (in the case of s 182(1)) or of information (in the case of s 183(1)) in order to achieve a particular purpose, namely to gain an advantage for himself or someone else, or to cause detriment to the corporation. As I have already noted, Windbox alleges that the advantage sought by Mr Leslie was to have the JACT grazing licences granted to him or his company, and the detriment to Windbox was that it would no longer be able to hold grazing licences over that land. Consequently, Mr Leslie would be able to conduct a business similar to that which Windbox had been operating and would have expected to continue to operate had it been granted the grazing licences.
[364] It seems to me that s 182(1) mainly relates to a person’s (improper) use of his or her position as a “director, secretary, other officer or employee” during the time when the person falls within one or other of those categories. Section 183(1) is much wider in its scope because it also relates to conduct of a person who was but is no longer a director, officer or employee of the corporation.

Section 182(1)

[365] The particulars pleaded in relation to the claims under ss 181 and 182(1) refer only to the period prior to Mr Leslie’s resignation from Windbox, namely that period during which he was an employee of Windbox. I have concluded that Windbox has not proved any of the misconduct alleged in [45.1.1] to [45.1.14] of the FSOC, or that the conduct alleged in [45.1.15] and [45.1.16] constituted misconduct.[420] Further, neither that conduct nor that alleged in [45.1.15] nor [45.1.16] of the FSOC supports the plaintiff’s contention that Mr Leslie was planning for and taking steps to establish a competing pastoral business.
[366] In relation to the conduct referred to in [45.1.17] to [45.1.20] of the FSOC, I have concluded that these things were done after the cessation of Mr Leslie’s employment on 31 January 2018. Importantly, Mr Leslie did not decide to apply for the grazing licences until 2 February 2018 at the earliest, and he did not actually apply for them until 5 March. When Mr Leslie took those steps he was no longer an employee of Windbox, and he was not an officer of Windbox. He was not using his position as an officer or employee of Windbox.
[367] From 2 February Mr Leslie was merely a contractor for Windbox, his sole duties being to manage the Station until Windbox found a replacement station manager. Windbox specifically excluded him from playing any part in – and therefore having any responsibility for – its negotiations with the CLC and the traditional owners.[421]
[368] When he took these steps Mr Leslie was not “using” any of the “powers” he had at the time as a contractor of Windbox. At all times, he was acting in his own time and in his own right. Nor was Mr Leslie “discharging” any of his “duties” as a contractor of Windbox. Nor did he “use his position” with Windbox. He did not suggest to the CLC or any others that he was making the application as a contractor of Windbox’s. It was quite the opposite.
[369] JACT also contended that even if it could be said that, by relying on his past experience as the manager, he was “using” his former position with Windbox, that use of “his position” was not “improper” as contemplated in s 182(1). Counsel referred to the passages quoted above from Amcor and Links Golf. I agree with that contention.
[370] Moreover, even if he was “using” some of the experience and knowledge that he acquired when he was the manager, I do not consider that he was thereby “using” his former position with Windbox. He was entitled to use “know-how” acquired during his work there, within the limitations discussed in more detail below in relation to the alleged breach of s 183(1) of the Corporations Act.
[371] The plaintiff has not made out this part of its claim.

Section 183(1)

[372] I have referred to the relevant pleading of this claim at [209] – [210] above, and summarised Winbox’s written closing submissions at [211] – <[422]422 above.
[373] I pause here to make some preliminary observations and findings.
[374] It is clear that by obtaining the JACT grazing licences JACT would gain an advantage for themselves. It is also clear that Windbox would have suffered detriment if, but for JACT having applied for and obtained the grazing licences, Windbox would have been granted grazing licences over the relevant land.[423] However s 183(1) requires much more than that. Amongst other things, it requires the plaintiff to establish that in applying for the grazing licences Mr Leslie improperly used certain information in order to gain such an advantage or to cause detriment to Windbox.
[375] Counsel for JACT correctly pointed out that [46] of the FSOC does not provide any particulars of how any of the information alleged in [46.1] was “used” by Mr Leslie.[424] All that was particularised was that Mr Leslie had particular knowledge. Counsel also contended that there was no evidence to fill that void. Consequently, the claim should fail for the same reason as did the claims in Hodgson at [1333] and [1423] and Links Golf at [702]. Despite that pleading point, I think it was clear that the plaintiff was contending that Mr Leslie was improperly using information obtained while he was an officer (or employee) of Windbox “in planning for, taking steps to make and making the competing application for” the JACT grazing licences.[425]
[376] I have found that Mr Leslie did not take any such steps until 2 February 2018 and did not make the application until 5 March 2018. Thus the relevant questions to ask are:
[377] I pause to make some observations about Windbox’s three contentions referred to in [426]426 above.
[378] I reject the second contention.[427] This was to the effect that Mr Leslie was in a position of conflict of interest until late April 2018 because he still had duties, as station manager, which included assisting in Windbox’s application for renewal of its grazing licences, but he proceeded to make the competing application without making any disclosure to Windbox or seeking Windbox’s consent. As I have already found, he had no such duties at least from 1 February 2018. Further, Windbox’s pleadings do not assert a positive obligation upon Mr Leslie to make such a disclosure to Windbox or to seek its consent.
[379] In the first and third of those contentions counsel for Windbox referred to the information relied on in [46.1] of the FSOC as “confidential information”.[428] Counsel also referred to and placed considerable emphasis on authorities concerning confidential information.[429] However, shortly after that,[430] counsel for Windbox took objection to the JACT defendants wrongly conflating “confidential information” with “information” for the purposes of s 183 of the Corporations Act. Counsel referred to the following observations of Beach J in CellOS Software Ltd v Huber[431], at [814]:

... it is to be noted that information does not need to be a company’s confidential information. But it must be information that has been acquired because of the relevant person’s position in the company.

[380] With respect, I agree with those observations of Beach J. However, despite the plaintiff’s objections to the JACT defendants’ references to “confidential information” and the plaintiff’s reliance upon authorities concerning confidential information, I do not think much turns on such a distinction in the present case.
[381] As I have just noted, counsel for Windbox referred to the information relied on in [46.1] of the FSOC as “confidential information”.[432] Counsel introduced their written submissions about ss 182 and 183 with a lengthy quotation from a passage in APT Technology Pty Ltd v Aladesaye,[433] where Foster J referred to and quoted from the reasons for decision of Jessup J in Wilson Parking Australia 1992 Pty Ltd v Rush[434]. Counsel underlined certain parts of that passage and in particular the references therein to confidential information. Shortly after that, counsel submitted that the “correct test is as recently restated in Advanced Fuels Technology v Blythe[435], per Macaulay J at [178]”. Counsel quoted from part of [178] where his Honour quoted from a passage in [40] of Del Casale which referred to lists of factors that “helped in determining whether information may be considered confidential.”[436]
[382] Advanced Fuels was concerned, amongst other things, with allegations that Mr Blythe, a former director and Chief Executive Officer of the plaintiff company (AFT), and Mr Wilson, a former employee of AFT, had breached s 183. It was alleged that after resigning from their positions at AFT, they set up and engaged in businesses that were in competition with AFT including entering into commercial arrangements with previous customers of AFT. The information said to have been wrongfully used by them fell into 3 broad categories:
[383] The Court dismissed AFT’s claims, notwithstanding that none of the defendants gave evidence. The passage from [178] quoted by counsel for Windbox was preceded by the following:

A primary question is whether the particular list of contacts possesses the necessary quality of confidence to preclude Mr Wilson retaining it. Accepting that in some cases a customer list may be confidential ... to answer the question in any particular case requires a consideration of the circumstances of its development and treatment.

[384] As I have noted, counsel for Windbox quoted a lengthy extract from Jessup J’s reasons in Wilson Parking. However the factual basis of the claim in that case is quite different to that in the present matter. Like the situation in Advanced Fuels the former employees had removed from their former employer confidential and commercially sensitive documents, data and other information which they then used for their own benefit. The only other case quoted at some length in Windbox’s written submissions was Courtenay Polymers v Deang,[438] but that quote was confined to Whelan J’s summary of “principles emerging from the South Australian Full Court decision of Southern Real Estate”. No reference to the latter decision was provided, but the passage quoted clearly relates to the fiduciary duties owed by directors and former directors, as distinct from employees or former employees.
[385] I have found more relevant the decision of the New South Wales Court of Appeal (Hodgson, McColl and Campbell JJA) in Del Casale.
[386] Del Casale was concerned with allegations that Mr Del Casale, a director and manufacturing manager of Artedomus (Aust) Pty Ltd (Artedomus) since 1998, and Mr Savini, a director of Artedomus since 1999, breached s 183 by misusing confidential information very shortly after severing their ties with Artedomus. Both of them had also been employees of Artedomus, and had companies which had held shares in Artedomus since its formation in 1998.
[387] The largest selling product of Artedomus was a stone which it sold under the name “Isernia”. It was a stone type known as modica (or Pietra di Modica) and came from the Ragusa district in Sicily. Mr Schepsis (who became the managing director of Artedomus when it was formed in 1998) had first seen this stone exhibited at a trade fair in Italy in 1991 and began importing it to Australia in 1993. From then until 2001, Mr Schepsis and (from 1998 when Artedomus was formed) Artedomus, were the sole importers of modica stone into Australia. Although it could be readily ascertained that Isernia came from the Ragusa region, it could not easily be ascertained that Isernia was modica stone. Artedomus went to some lengths to conceal this. Only directors of the company, the warehouse manager and those responsible for payments to suppliers were given this information. Mr Schepsis repeatedly emphasised to each of Mr Del Casale and Mr Savini that the source of products such as Isernia was not to be disclosed.
[388] In late 2002 Mr Del Casale and Mr Savini resigned from their employment at Artedomus, relinquished their directorships, and sold the shares which their companies had held in Artedomus. Mr Del Casale also entered into an agreement with Artedomus that he would not compete with Artedomus for three years, and would keep confidential any “commercially sensitive information” he had learnt while in Artedomus’ employ.
[389] Shortly before that, on 2 September 2002, Mr Del Casale formed a company Stone Arc Pty Ltd (Stone Arc). Mr Savini became a director of Stone Arc shortly afterwards. Mr Del Casale and Mr Savini visited the Ragusa region from where modica stone was supplied, and met some suppliers of modica stone. On 3 December, Mr Del Casale resigned as a director of Stone Arc and sold his shares in that company to Mr Savini and a trust. On 12 December, Stone Arc received sample crates of modica stone from the two suppliers in Ragusa who Mr Savini had met when he went there a few months earlier.
[390] Artedomus obtained injunctions on account of breaches of confidentiality and s 183 of the Corporations Act, and Mr Del Casale’s breach of contract. The primary judge found that the information that Artedomus’ successful stone Isernia was modica stone, and thus sourced from the Ragusa region of Sicily, was highly confidential information in the nature of a trade secret. Accordingly, there was an obligation on Mr Del Casale and Mr Savini to keep that information confidential, even after termination of their relationship with Artedomus.[439]
[391] The Court of Appeal allowed their appeal, apart from the primary judge’s finding that Mr Del Casale had breached his agreement not to compete for three years.[440] Most of their Honour’s reasons related to those parts of the case which, like the present matter, did not involve an express agreement such as a restraint of trade clause. In short, their Honours all agreed that there was no relevant breach of an obligation of good faith or confidentiality.[441]
[392] Hodgson JA observed that even though certain information might be confidential and cannot be used by an employee against the interests of his employer during the employment, a duty to preserve the confidentiality of some of that information may not necessarily continue after the employment has ended.[442]
[393] At [36] his Honour referred to four elements necessary to an action brought on equitable grounds for breach of confidence, the first three identified by Megarry J in Coco v AN Clark (Engineers) Ltd[443] and the fourth identified by Gummow J in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic)[444] and Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Secretary, Department of Community Services[445]:
[394] At [37] Hodgson JA referred to the additional consideration required where the person is no longer employed (and there has not been any relevant contractual prohibition).

However, in applying these general equitable principles to the particular case of post-employment use, by an ex-employee, of the confidential information of an employer obtained during employment, there are particular considerations which tend to qualify their operation. They are that very often an employee will necessarily through employment come to have knowledge which the employer would prefer not to have generally known, that often such knowledge will become part of the employee’s know-how (which the employee should be able to use after employment ceases), that very often it is difficult or impossible to isolate from the employee’s general know-how particular pieces of confidential information which the employee is not permitted to use while otherwise being free to use know-how generally, and that competition should not be prevented by preventing ex-employees using their know-how.

[395] His Honour added, at [38]:

Considerations such as these have led to a distinction being drawn [in other cases] between two classes of confidential information, one of which an ex-employee cannot use (even in the absence of contractual restrictions), and the other of which an ex-employee can use, at least unless there is a valid contractual restraint. ... the latter class is often called “know-how”.

[396] His Honour added, at [39]:

It is clear that information may be confidential, even if it is known to persons other than the person claiming confidentiality: it may be sufficient that the information is not freely available, particularly if it is not freely available to competitors of the employer.

[397] Then appears the passage quoted by Macaulay J at [178] of Advanced Fuels and relied on by counsel for Windbox as “the correct test”. At [40]:

In Wright v Gasweld, at 334, Kirby P listed some factors that helped in determining whether information may be considered confidential. That list has been expanded by R Dean, The Law of Trade Secrets and Personal Secrets, (2002) 2nd ed, at 190 to include:

  1. The extent to which the information is known outside the business.
  2. The extent to which the trade secret was known by employees and others involved in the plaintiff’s business.
  3. The extent of measures taken to guard the secrecy of the information.
  4. The value of the information to the plaintiffs and their competitors.
  5. The amount of effort or money expended by the plaintiffs in developing the information.
  6. The ease or difficulty with which the information could be properly acquired or duplicated by others.
  7. Whether it was plainly made known to the employee that the material was by the employer as confidential.
  8. The fact that the usages and practices of the industry support the assertions of confidentiality.
  9. The fact that the employee has been permitted to share the information only by reason of his or her seniority or high responsibility.
  10. That the owner believes these things to be true and that belief is reasonable.
  11. The greater the extent to which the “confidential” material is habitually handled by an employee, the greater the obligation of the confidentiality imposed.
  12. That the information can be readily identified.
[398] Hodgson JA added, at [41]:

[41] In my opinion, the stronger these factors are in any particular case, the more likely it is that the particular information will be treated as a trade secret that the ex-employee is not entitled to use or divulge; but in my opinion there is another factor or class of factors which is also extremely important to this question, namely the extent to which the particular information can be readily isolated from the employee’s general know-how which the employee is entitled to use after the end of employment.

[42] In cases where the confidential information is of the nature of a secret formula or process, involving a number of elements such that independent discovery by inquiry or experiment is unlikely to occur, that confidential information can quite readily be distinguished from an employee’s general know-how. In those cases, the courts are ready to restrain use of that information by an ex-employee. ...

[43] However, where the confidential information is something that is ascertainable by inquiry or experiment, albeit perhaps substantial inquiry or experiment, and the know-how which the ex-employee is clearly entitled to use extends to knowledge of the question which the confidential information answers, it becomes artificial to treat the confidential information as severable and distinguishable from that know-how; and in that kind of cases, courts have tended not to grant relief.

[399] At [47] Hodgson JA noted another distinction that would sometimes be relevant (as it is in the present matter) where the complaint is about the ex-employee (merely) using the information as distinct from disclosing it to other persons. His Honour said:

In my opinion, it may well be the case that equitable relief could be granted against an ex-employee disclosing confidential information in some cases where it would not be granted against the ex-employees using it.

(emphasis added by me)

[400] At [49] Hodgson JA concluded that although the “degree of confidentiality” of the information held by Mr Del Casale and Mr Savini was “quite high”, it was not information “that can realistically be separated out from the general know-how in relation to the stone business” which they acquired. Accordingly, there was no basis for prohibiting them from using that information as they intended.[447]
[401] This conclusion made it unnecessary for Hodgson JA to determine whether the information was “used” in breach of confidence. However, his Honour saw no reason to disturb the primary judge’s conclusion that Mr Savini did use the information that Isernia was modica stone when he located his suppliers.
[402] At [59] – [60] Hodgson JA referred to the application of s 183. Given the conclusions that both Mr Del Casale and Mr Savini had been directors and employees of Artedomus, and that they used the confidential information to gain an advantage for themselves, the only question remaining was whether they used it “improperly”. After noting that “the Corporations Act does not elaborate on what would amount to improper use of such information”, His Honour said, at [60]:

In my opinion, use of the information in breach of an equitable obligation of confidentiality would be improper use of the information; but I have found that the use of this information by Mr Del Casale and Mr Savini was not in breach of any such equitable obligation. I have also not found any breach of contract by Mr Del Casale in relation to use of the information. In those circumstances, in my opinion there is no basis for holding that they improperly used the information; and accordingly, in my opinion s 183 of the Corporations Act has no application.

[403] As I have previously noted, “information” that may be covered by s 183(1) does not necessarily have to be “confidential information”.[448] However, in most cases the information would be “improperly use[d]” because it was confidential. Consistent with what Hodgson JA said at [60] of Del Casale “improper use” of information in the sense used in s 183 corresponds with the protection equity or the common law will afford to the use of certain information. See too Links Golf at [700] and Manildra Laboratories at [131] – [133].

Submissions

[404] Counsel for Windbox placed much emphasis on Mr Leslie’s involvement in negotiations with the CLC regarding the grazing licences in 2016 and 2017. He cultivated a good relationship with the CLC and the traditional owners. He was aware of the conditions of the previous grazing licences and of the conditions sought by the traditional owners for new grazing licences, and of Windbox’s desire to obtain licences for considerably longer terms than those which the traditional owners were willing to agree to.[449]
[405] I accept all of this. However, there is no evidence of there having been any discussion about the grazing licences between either or both of the directors and/or Mr Cole after October 2017 until Mr Vagg’s email to Mr Dodd on 30 January 2018. Nor is there evidence of any “negotiations” with the CLC after the cancellation of the proposed meetings with the traditional owners on 11 and 12 October 2017 until Ms Wilkie engaged with Mr Cole in February 2018. There is no suggestion that Mr Leslie had any knowledge of any subsequent discussions or negotiations after October 2017 until 24 January 2018 at the earliest when Mr Dodd sent his email to Mr Vagg and Mr Leslie.
[406] Counsel for Windbox then made the following submission about Mr Leslie:

155.6. Critically, he knew that Mr Dodd as the controlling director of Windbox had given instructions to Mr Cole to accept the terms offered by the CLC and the traditional owners, which, if communicated to the CLC, would preclude him from seeking the Grazing Licences for himself. He also knew that Mr Vagg was attempting to block or delay Windbox’s acceptance of these terms. This was legally privileged information and was in any event confidential to Windbox.

155.7. He was in possession of this information by virtue of it being leaked to him by Mr Vagg, who he understood was in dispute with Mr Dodd and who had aligned himself with Mr Leslie against the interests of Mr Dodd and Windbox. The inference that this information was being “leaked” by Mr Vagg to Mr Leslie is to be drawn from the fact that emails between Mr Vagg and Mr Dodd were being forwarded to Mr Leslie at a time critical juncture without covering explanation and without Mr Dodd being copied in. It is obvious that there were other communications and discussions between Mr Vagg and Mr Leslie about this information and how it could be used to their mutual advantage and contrary to the interests of Mr Dodd and Windbox.

155.8. From the point at which he sought to pursue his own designs in relation to the Grazing Licences, he was in clear and direct and fundamental conflict with Windbox’s interests.

155.9. That point in time was at least by 4 January 2018, when he spoke to Mr Spazzapan.

(underline added by me for emphasis)

[407] The knowledge which counsel for Windbox stressed as “critical” was Mr Leslie’s knowledge of the “information” that Mr Dodd had given instructions to Mr Cole to accept the terms offered by the CLC and the traditional owners. Indeed this is the information particularised in [46.2] of the FSOC which alleges, in effect, that that information was provided on 29 January. There is no allegation in the pleadings that that “critical” information was given to or obtained by Mr Leslie prior to that date. Further, there is no evidence that Mr Leslie obtained such information from Mr Vagg, or anyone else. Nor is there any evidence that he had any such information when he spoke to Mr Spazzapan on 4 January 2018. Moreover, there was no reliable evidence that Mr Dodd had in fact given instructions to Mr Cole to accept the terms offered by the CLC and the traditional owners on or before 29 January 2018, or indeed at any time prior to Mr Leslie deciding to apply for the licences.[450]
[408] In their written closing submissions counsel for JACT dealt with the “information” that Windbox had particularised, in [46.1.1] and [46.1.2] of the FSOC.
[409] In relation to the information in [46.1.1], JACT submitted that:
[410] In relation to the information in [46.1.2] counsel for JACT submitted that:
[411] In their written submissions of 10 June 2019 in reply to the JACT submissions,[459] counsel for Windbox stated that:

24.4. For the avoidance of doubt, the information that it was improper for Mr Leslie to use was that information which enabled him to exploit the commercial opportunity that was available to Windbox and to actively compete with his former employer before and within a matter of days of his resignation, to his own advantage and to the detriment of Windbox, namely:

24.4.1. information about the content of Windbox’s applications for the Grazing Licences, including their strong and weak points;

24.4.2. information about the status and progress of Windbox’s negotiations with the CLC;

24.4.3. information about the preferred terms of the Grazing Licences sought by Windbox;

24.4.4. information indicating that Windbox’s confirmation of the Grazing Licences on the terms proposed by the CLC and the Traditional Owners was imminent;

24.4.5. information about the falling out between Windbox’s directors; and

24.4.6. information indicating that Mr Vagg was taking active steps to stall Mr Dodd and Mr Cole.

[412] I pause to note that the above, at the reply stage of the proceedings, is in effect a further and better particularisation of the broad reference to “the state of negotiations ... in relation to the renewal of the grazing licences” in [46.1] of the FSOC and a substantial expansion of [46.1.1]. In some respects those submissions touch on some of the more general allegations pleaded in [40] of the FSOC, which cover the whole period from 2010 to 2018. Of particular note is the apparent abandonment of the “critical” point that Mr Leslie knew that Mr Dodd “had given instructions to Mr Cole to accept the terms offered by the CLC and the traditional owners”.[460] Nor did Windbox respond to JACT’s submissions concerning [46.1.2] of the FSOC, in particular JACT’s submission that there was no evidence that Mr Dodd had given those instructions to Mr Cole.
[413] Counsel for Windbox also submitted that:

24.5. The above information is clearly distinguishable from Mr Leslie’s “general know-how” that he was entitled to use freely after his employment ended, and which Windbox has never contended he should be prevented from using. In this context, such “general know-how” might consist of information relating to matters such as cattle mustering, breeding and welfare. It did not extend to information relating to Windbox’s imminent finalisation of a commercial opportunity that it had been negotiating for some years.

24.6 The question of whether the CLC would have provided information about the availability of the Grazing Licenses to a prospective applicant on request is fundamentally different, and with respect not comparable, to the question of whether it was improper for Mr Leslie to use information about the progress of Windbox’s negotiations with the CLC, being information which came into his possession as a consequence of his position (whether as an employee or an officer) with Windbox, to his own advantage in the timing of his competing application, submitted 2 days after he unilaterally terminated his full-time employment with Windbox.

[414] I pause to observe here that the focus of Windbox’s submissions was now on the timing of the JACT application. I also note that the competing application was lodged in early March, not two days after the termination of the employment of Mr Leslie and Ms Rowbottom.
[415] After the completion of oral submissions on 23 August 2019 and further written submissions by counsel for the JACT defendants[461], counsel for Windbox provided detailed written submissions in response to those submissions and also to some of the oral submissions made by counsel for the JACT defendants.[462] Following a previous request by the Court, counsel set out a number of findings sought by the plaintiff. A key finding relevant to the present topic was that:

Mr Leslie was aware that Mr Dodd had instructed Windbox’s Solicitor, Mr Cole, to accept the CLC’s terms concerning the renewal of the Grazing Licences and that Mr Vagg had stalled this occurring, giving as Mr Leslie the opportunity of making a competing application.[463]

[416] The first part of that finding, to the effect that Mr Dodd had given those instructions to Mr Cole and that Mr Leslie was aware of that, concerned the “critical” point that Windbox had not pressed in its reply submissions of 10 June 2019. But, having reinstated that critical allegation at this late stage, Windbox still did not attempt to identify evidence in support of that finding. All it did was to repeat the allegations of a conspiracy between Mr Leslie and M Vagg and to ask the Court to draw the desired inferences from that material.
[417] Further, Windbox attempted to further bolster its contentions that the finalisation of these negotiations was “imminent”, and that Mr Leslie knew this, by introducing a new allegation to the effect that the only thing yet to be done was for Windbox to sign the grazing licences.[464] Again, Windbox did not provide any references to evidence in support of these new allegations. As I point out in [422] below, even without the existence of the JACT applications, there were many hurdles in the way of Windbox getting agreement from the traditional owners. Windbox’s signing of the grazing licences was nowhere near imminent. Nor was the finalisation of negotiations in favour of Windbox imminent, even if there were no competing applications.
[418] The oral and post oral submissions also included some debate about Windbox’s remedies if Mr Leslie had competed unlawfully and breached s 183(1). Counsel for JACT contended that Windbox should be put into the position that it would have been in had Mr Leslie competed lawfully, not into the position it would be in if he had not competed at all.[465] In response counsel for Windbox submitted:

The plaintiff submits that the correct and proper way for Mr Leslie to use Windbox’s information, without breaching section 183, would have been for him to either disclose his intention to compete to Windbox (thereby ensuring Windbox could indeed “close the deal” it had taken years to negotiate), or to wait until the outcome of Windbox’s application was known and only then, in the event that the application was not successful, put in a competing application.[466]

[419] This response suggests that Windbox’s real contention is that it was improper of Mr Leslie to make the application before disclosing his intention to do so to Windbox. Had he so disclosed he would not have been in breach of s 183. Had he waited until after he disclosed his intention to Windbox, his use of the information would not have been improper. In other words, Windbox is not saying that the information was confidential or otherwise of such a nature that Mr Leslie could never use it. Rather he should not have used such information without first notifying Windbox of his intentions.[467]

Consideration of [46] of the FSOC

[420] The overarching allegation pleaded in [46.1] that Mr Leslie “knew the state of negotiations between Windbox and the CLC and Daguragu in relation to the renewal of the grazing licences” is far too general and does not meet the requirement clearly stated in the authorities that the information relied upon must be clearly and readily identified.[468]
[421] Even if the plaintiff had pleaded, or sought leave to amend its pleading, to provide the additional allegations set out in [24.4] of its reply submissions, most of those would still not be a sufficient identification of the information, the use of which was said to be improper.[469] The same applies to the very general allegations contained in [40] of the FSOC that refer to circumstances over a lengthy period from 2010 until 2018. Most of the allegations referred to “information about” matters of a very general nature. For example, no attempt was made to identify what is meant by Windbox’s “strong and weak points” such as could enable the Court to consider what if any “points” were known to Mr Leslie and whether he used his knowledge about one or more of those points improperly. Similarly, the allegations concerning “information indicating that” a certain state of affairs existed, are not sufficiently particularised. For example, even if Mr Vagg was taking active steps to stall Mr Dodd and Mr Cole, it is impossible to discern how Mr Leslie’s making of enquiries to the CLC and then taking steps to apply for the grazing licences, could be said to involve him using any knowledge that he might have about that, or doing so improperly.
[422] Further, although counsel repeated and stressed Windbox’s “imminent finalisation of a commercial opportunity that it had been negotiating for some years”, the evidence does not satisfy me that this was the case at any relevant time. Even if Mr Dodd did end up giving Mr Cole instructions along the lines of those set out in the emails of 24 and 29 January there are a number of reasons why they may well not have resulted in Windbox being granted the grazing licences at all. There were still other terms to be negotiated (as is evident from the later discussions between Mr Cole and Ms Wilkie) and Mr Vagg appeared reluctant to agree to Mr Dodd’s proposal without further discussion between them. There were two other very important reasons why the traditional owners may not have been prepared to authorise the grant of the grazing licences to Windbox. The first is the fact that Mr Leslie was no longer employed by Windbox and would only be staying on for a short time until a replacement station manager was found. The second is the fact that Mr Dodd was proposing to sell his 85% share to someone else, relatively soon. In those circumstances, there was every prospect that the traditional owners would not have granted the grazing licences to Windbox. Indeed this is borne out by the fact that the traditional owners were not prepared to grant a 5 + 5 year term over Northern Paddocks and expressed some reservations about the new Station Manager.
[423] In relation to the information alleged in [46.1.1] of the FSOC it is clear that Mr Leslie knew on 2 February 2018 that “the parties had not formalised the terms of their ongoing legal relationship in relation to the grazing licences.” He may well have already assumed that to be the case because of his knowledge about the considerable delays since the licences expired some seven or more years earlier, and Windbox’s failed attempts in 2016 and again in 2017 to persuade the traditional owners to depart from their insistence upon maximum terms of 5 + 5 years. However, he did not know this to be the fact until he asked and was told by Ms McIntosh on 2 February that there was no impediment to him applying for the grazing licences. He acquired that information, as could any other member of the public, simply by making that inquiry. It was not confidential information. He did not “improperly” use that information. I agree with JACT’s submissions summarised by me in [409] above.
[424] In relation to the information alleged in [46.1.2] I am not satisfied on the balance of probabilities that anyone from Windbox sent the email dated 29 January 2018 to Mr Cole. See my reasoning and conclusion at [300] above. I also agree with the JACT defendants’ submissions summarised by me in [410] above, except that I would not conclude that the email was a ‘chaser’. I suspect Mr Dodd had other motives for copying that email to Mr Leslie at that very late stage of Mr Leslie’s employment, perhaps to deliberately put him into a position of knowledge that he could later use against him and others, as he has now done by making these serious allegations against him, Ms Rowbottom and the CLC.
[425] Further, even if, contrary to my findings above, Mr Leslie did read the emails of 24 and 29 January or was aware of their contents, the evidence would not be sufficient for me to conclude that he “used” the information contained in those emails when he decided to make the application for the grazing licences. That information was not relevant to him.
[426] Moreover, this was not information that Mr Leslie requested. Rather, it was information that Mr Dodd, for reasons not disclosed, voluntarily provided to Mr Leslie at that very late stage of his employment of some six years. It was not “information [that] was conveyed in circumstances where a reasonable man standing in the shoes of [Mr Leslie] would have realised, upon reasonable grounds, that the information was given to [him] in confidence. Thus there [was not an] obligation of confidentiality attaching to it.”[470]
[427] By that time Mr Leslie was very much preoccupied with the uncertainties of the next few days and weeks, and in particular when he would need to uproute his family and move elsewhere. Mr Dodd was fully aware that Mr Leslie’s employment was about to come to an end. Had he considered that it was information that Mr Leslie should not have, two days before his employment was to end, he would have said so at the time. Indeed, by that time Mr Dodd already had trust issues with Mr Leslie, in relation to his request for payment for his equipment.
[428] The plaintiff has not made out the allegations in [46] of the FSOC. I dismiss the claim of breach of s 183(1) of the Corporations Act.

Conclusions and Orders

[429] The plaintiff has not proven its case. The plaintiff’s action is dismissed.
[430] There will be judgment for the Third, Fourth and Fifth Defendants.
[431] The proceedings brought by the Plaintiff against the First and Second Defendants are dismissed.
[432] The Third, Fourth and Fifth Defendants have liberty to apply to enforce the Plaintiff’s undertaking as to damages.
[433] The Plaintiff and the First and Second Defendants bear their own costs of and incidental to the proceedings.

---------------------------------

[1] This was later varied and extended.

[2] These were referred to as the contract and estoppel claims. See Fourth Statement of Claim filed 6 March 2019 (FSOC) [28] and [28A].

[3] FSOC at [51] – [52].

[4] FSOC at [50] – [50A].

[5] FSOC at [29] – [46].

[6] FSOC at [47].

[7] Orders made 17 July 2019.

[8] See Windbox Pty Ltd v Daguragu Aboriginal Land Trust & Ors [No 2] [2019] NTSC 96.

[9] See FSOC at [53.6] and [53.7].

[10] Northern Territory Portions 1318 and 2395 shown on Plan S83/205, being all of the land described in Certificate of Title Register Book Volume 815 Folio 431.

[11] ALRA, s 4(1).

[12] ALRA, s 23(1)(e)(i).

[13] ALRA, s 5(2).

[14] See for example ALRA, s 23.

[15] Affidavit of Luke Timothy Gardiner sworn 21 September 2018 (Exhibit P11) at p 23.

[16] Exhibit P11 at p 39.

[17] Exhibit P11 at p 56.

[18] ASIC Extract in respect of Windbox (Exhibit P15). See [98] below.

[19] Affidavit of Mr Zebb Leslie affirmed 9 February 2019 (Exhibit J3) at p 2.

[20] Exhibit J3 at [28.1] and pp 54-55.

[21] Exhibit J3 [28.1] and pp 53-54.

[22] Exhibit J3 at [28.2] and pp 57-58.

[23] Exhibit J3 at [28.3] and [29].

[24] Affidavit of Ms Sarah Catherine Wilkie sworn 23 February 2019 (Exhibit C1) at [32] – [33] and pp 78-81.

[25] Exhibit C1 at pp 80-81.

[26] Exhibit C1 at pp 78-79.

[27] Exhibit J3 at pp 108-124.

[28] For example, when Mr Leslie was directed to section 2 of the document where it was proposed that Windbox would pursue potential alternative agricultural activities to diversify risk, he laughed and explained that it was not possible to change the licence from grazing to agricultural/pastoral.

[29] Exhibit J3 at pp 60-71, 75-83, 91-103 and 105-106.

[30] Exhibit P11 at p 93. This email was one of the emails that Mr Cole sent to Mr Dodd and Mr Vagg on 1 February 2018 and which Mr Vagg then sent on to Mr Leslie the same day. See Exhibit J3 at p 224.

  1. [31] See for example emails of 23 November 2016, Exhibit P10 at p 43.

[32] Exhibit J3 at p 139.

[33] Exhibit J3 at p 144.

[34] Exhibit J3 at p 153.

[35] Exhibit J3 at p 149.

[36] Exhibit C1 at p 85.

[37] Exhibit J3 at [31] – [33] and Transcript at pp 624-627.

[38] Exhibit J3 at [34].

[39] Exhibit P11 at p 97.

[40] Transcript at p 235.

[41] Exhibit J3 at p 163.

[42] Exhibit P11 at pp 101-102. Mr Cole forwarded this email to Mr Dodd and Mr Vagg on 1 February 2018.

[43] Exhibit J3 at pp 166-167.

[44] The summary also stated: “The 5 + 5 doesn't seem satisfactory.”

[45] Exhibit J3 at pp 166-168.

[46] Exhibit J3 at pp 166-168.

[47] Affidavit of Mr Zebb Leslie affirmed 19 October 2018 (Exhibit J2) at p 7.

[48] Exhibit J2 at p 7.

[49] See [28] above.

[50] Exhibit P13.

[51] Those emails, and the subsequent dealings between Mr Cole and the CLC make no reference to that suggestion.

[52] Exhibit P11 at p 105.

[53] Exhibit J3 at p 171.

[54] Exhibit J3 at p 171.

[55] Exhibit J3 at p 177.

[56] Exhibit J3 at p 179.

[57] See [37] above.

[58] Exhibit J3 at p 181.

[59] Exhibit J2 at pp 2-4.

[60] Exhibit J3 at [37] – [39].

[61] Exhibit J3 at [39] – [40].

[62] Exhibit J3 at [41].

[63] Exhibit J3 at [42] and Transcript at p 657. See too Affidavit of Kylie Rowbottom dated 9 February 2019 (Exhibit J4) at [10] – [11].

[64] Document that is entitled ‘PRIV 1.3’ which purports to be a diary note of Markus Spazzapan of 4 January 2018 (Exhibit P20).

[65] Affidavit of Marcus Spazzapan dated 20 March 2019 (Exhibit J9) at p 23.

[66] Affidavit of Mr Dodd dated 21 September 2018 (Exhibit P3) at p 16.

[67] Exhibit J3 at p 188.

[68] Exhibit J3 at [45].

[69] Exhibit J3 at [45] – [46].

[70] Exhibit J3 at [47] – 48]. See too Exhibit J4 at [12] – [13] and Transcript at p 568-570; Exhibit J8 at [3] and Transcript at pp 322 and 450.

[71] Exhibit J9 at p 29.

[72] Exhibit J9 at p 30.

[73] Exhibit J9 at pp 32-40.

[74] Exhibit J9 at pp 43-44.

[75] Exhibit P3 at p 18; Exhibit J3 at p 190. The email continued with a list of items and infrastructure to be reimbursed, which is not reproduced here.

[76] Affidavit of Mr Raymond Dodd made on 6 March 2019 (Exhibit P10) at p 49; Exhibit J3 at pp 194 and 197.

[77] Exhibit J3 at p 197.

[78] Exhibit J3 at p 194.

[79] Exhibit J3 at p 196.

[80] Exhibit J3 at p 196.

[81] Exhibit J3 at p 199.

[82] Exhibit J3 at [52].

[83] Transcript at p 240.1.

[84] Exhibit J3 at p 202.

[85] Exhibit J3 at p 204.

[86] Exhibit J3 at p 207.

[87] Exhibit J3 at [54] and p 265.

[88] Exhibit J3 at p 212.

[89] Exhibit J3 at p 209.

[90] See [67] above.

[91] Exhibit J3 at p 214.

[92] See [42], [44], [51] and [72] above.

[93] Exhibit J3 at p 217.

[94] Exhibit J9 at pp 48, 51, 52 and 57.

[95] Exhibit J3 at p 220.

[96] Exhibit C1 at [48] and p 94.

[97] In her email of Ms Wilkie had offered to put the Vagg amendment to the traditional owners.

[98] Exhibit J3 at [61].

[99] Exhibit J3 at pp 224-256.

[100] Exhibit P11 at pp 101-103.

[101] Exhibit P11 at p 101.

[102] Exhibit J3 at p 258.

[103] Exhibit J3 at [62] and pp 224-256.

[104] Exhibit J3 at [62].

[105] Exhibit J3 at p 263.

[106] Exhibit J3 at p 265.

[107] Exhibit J3 at [64].

[108] Exhibit J3 at p 267.

[109] Exhibit J3 at p 267.

[110] Exhibit J3 at [68].

[111] Exhibit J3 at [69].

[112] Exhibit J3 at [70].

[113] Exhibit J3 at [70].

[114] Exhibit J3 at p 271.

[115] Exhibit P11 at p 110.

[116] Exhibit P11 at p 110.

[117] Exhibit P15.

[118] Exhibit C1 at p 105.

[119] Exhibit J3 at p 274.

[120] Transcript at pp 324-334.

[121] Exhibit C1 at [50] and p 96.

[122] Exhibit P3 at p 25.

[123] Exhibit J3 at p 333.

[124] Exhibit J3 at [72] and p 288.

[125] Exhibit J4 at [16].

[126] Exhibit J4 at [17] – [19].

[127] Exhibit J4 at [20] – [21].

[128] Eight Affidavit of Luke Timothy Gardiner sworn 5 March 2019 (Exhibit P12) at pp 86-87.

[129] Exhibit J3 at p 310.

[130] Exhibit C1 at p 98.

[131] Exhibit C1 at p 99.

[132] Exhibit J3 at p 357.

[133] Exhibit J3 at p 357.

[134] Exhibit J3 at p 359. In addition to copying Mr Vagg into that email, Mr Dodd said nothing about the fact that Mr Vagg was no longer a director.

[135] Exhibit J3 at [84].

[136] Exhibit P12 at p 86.

[137] Exhibit J3 at p 335.

[138] Exhibit J3 at p 335.

[139] Exhibit P3 at p 26.

[140] Exhibit J3 at p.361.

[141] Exhibit J3 at p 361.

[142] Exhibit C1 at p 100.

[143] Exhibit J3 at p 32.

[144] Exhibit P3 at p 27.

[145] Exhibit C1 at p 101.

[146] Transcript at pp 193.7 and 251.

[147] Transcript at p 194.4.

[148] Transcript at p 251.9.

[149] Affidavit of Michael Cann dated 5 March 2019 (Exhibit P2) at [3].

[150] Mr Cann accepted in cross examination that Mr Leslie had told him that he had been “doing a bore run” on the day that he arrived at the Station at Kalkarindji and on the basis that Mr Leslie’s last bore run was on 27 April 2018, it was possibly “somewhere around” that date that they arrived: Transcript at p 122. See also Exhibit P2 at [2]. Ms Cann accepted in cross-examination that they had arrived on the evening of 27 April 2018 and that the reference in her affidavit to 18 April was a mistake: Transcript at p 151.

[151] Exhibit C1 at p 105.

[152] Exhibit C1 at pp 105-6.

[153] Exhibit P12 at p 89.

[154] Exhibit C1 at [69]-[71].

[155] Exhibit C1 at p 116.

[156] Exhibit C1 at p 118.

[157] FSOC at [30A].

[158] Exhibit C1 at pp 120, 127 and 132.

[159] Exhibit C1 at pp 125 and 132.

[160] Exhibit C1 at p 14.

[161] Exhibit C1 at p 14.

[162] See my Reasons for Decision in Windbox Pty Ltd v Daguragu Aboriginal Land Trust & Ors [2019] NTSC 47 (Windbox [No 1]), particularly [3], [19], [21], and [28] – [32].

[163] See Orders made on 22 February 2019 and my Reasons for Decision in Windbox [No 1].

[164] FSOC at [46.1.2].

[165] See [98], [106] – [107], [110] – [112] and [120] above.

[166] Affidavit of Mr Dodd dated 4 March 2019 (Exhibit P5) at [44] – [48].

[167] Presumably this a reference to the unsuccessful negotiations in 2015 referred to in [19] to [21] above.

[168] Plaintiff’s Written Closing Submissions dated 26 April 2019 (Windbox Submissions 26 April 2019) at [127].

[169] Third, Fourth and Fifth Defendants’ Written Closing Submissions dated 27 May 2019 (JACT Submissions 27 May 2019) at [10.3] and [10.5].

[170] Transcript at pp 195.5 and 252.8-253.4.

[171] JACT Submissions dated 27 May 2019 at [10.6].

[172] Exhibit P11 at p 101. See [86] above.

[173] Affidavit of Mr Dodd dated 16 November 2018 (Exhibit P4) at pp 6-30.

[174] Exhibit P5 at pp 13-37.

[175] Exhibit P5 at [14].

[176] Giannarelli v Wraith (No.2) [1991] HCA 2; (1991) 171 CLR 592 per McHugh J at 606.

[177] Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 per Hodgson J at 94.

[178] See [65] and [87] above.

[179] See [75] above.

[180] See [108] above.

[181] See for example [44] above.

[182] As will appear later in these reasons, I reject these allegations. See for example in [307] – [309] below.

[183] Windbox Submissions 26 April 2019 at [97.3].

[184] Windbox Submissions 26 April 2019 at [155.7] (quoted in [406] below).

[185] Windbox Submissions 26 April 2019 at [98].

[186] Windbox Submissions 26 April 2019 at [155.7] (quoted in [406] below).

[187] Windbox Submissions 26 April 2019 at [97.4], [98] and [155.6] (quoted in [406] below).

[188] JACT Submissions 27 May 2019 at [9].

[189] [2013] FCA 909; (2013) 310 ALR 165 at [2954] and [2959].

[190] His Honour referred to other cases including Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 (Jones v Dunkel) at 308.

[191] (2011) 81 NSWLR 498 at [66] and [79].

[192] [2014] FCAFC 15; (2014) 219 FCR 322 (Ashby v Slipper) at [141], [142] and [157]. See too Lawrie v Lawler [2016] NTCA 3 per Heenan AJ at [455] – [456].

[193] See [307] – [311] below.

[194] See my observations at [142] about inferences that can or cannot be drawn where a party asserts legal professional privilege.

[195] Windbox Submissions 26 April 2019 at [98].

[196] See [265] – [311] below.

[197] See [307] – [311] below.

[198] See [275] – [292] below.

[199] See [68] – [70] above and [294] – [302] below.

[200] Windbox Submissions 26 April 2019 at [157].

[201] Transcript at p 363.9.

[202] The Affidavit of Michael John Cann made 17 January 2019 (Exhibit P1) at [7].

[203] Transcript at p 139.

[204] Affidavit of Mr Rhett Donald Mobbs made 29 January 2019 (Exhibit P7).

[205] Transcript at p 163.5.

[206] (1977) 52 ALJR 189 at 197.

[207] See too letter dated 10 September 2019 annexed to Affidavit of Geoffrey John Stirk made on 12 September 2019.

[208] See [119], [127] and [127] above.

[209] R v Toohey; ex parte Meneling Station [1982] HCA 69; (1982) 158 CLR 327 at 355-9 (Brennan J). See too Northern Land Council v Quall [2019] FCAFC 77.

[210] As to the “satisfaction” requirement in s 19(5) ALRA see Ellis v Central Land Council [2018] FCA 35; (2018) 355 ALR 93 and Ellis v Central Land Council [2019] FCAFC 1.

[211] [2014] FCA 25; (2014) 220 FCR 202.

[212] [1988] HCA 16; (1988) 164 CLR 604.

[213] See Windbox [No 1].

[214] Gurindji land claim to Daguragu Station: report by the Aboriginal Land Commissioner, Mr Justice Toohey, to the Minister for Aboriginal Affairs and to the Administrator of the Northern Territory (1982) Office of the Aboriginal Land Commissioner; Gurindji land claim to Daguragu Station: Further report to the Minister for Aboriginal Affairs and to the Administrator of the Northern Territory by the Aboriginal Land Commissioner, Mr Justice Maurice (1985) Office of the Aboriginal Land Commissioner.

[215] FSOC at [40].

[216] FSOC at [41].

[217] FSOC at [45].

[218] See [312] – [350] below.

[219] FSOC at [46.1].

[220] Windbox Submissions 26 April 2019 at [95].

[221] Windbox Submissions 26 April 2019 at [96].

[222] Windbox Submissions 26 April 2019 at [97].

[223] Noting that s 182 extends to an employee.

[224] JACT Submissions 27 May 2019 at [41].

[225] JACT Submissions 27 May 2019 at [42].

[226] JACT Submissions 27 May 2019 at [42].

[227] JACT Submissions 27 May 2019 at [42].

[228] JACT Defendants further submissions following hearing on 23/8/19 filed 6 September 2019 (JACT Further Submissions 6 September 2019) at [3].

[229] Plaintiff’s Further Written Submissions in Reply dated 27 September 2019 (Windbox Response Submissions 27 September 2019).

[230] Also, in footnote 18 to paragraph [16] of their written opening submissions of 1 March 2019, counsel for the JACT defendants stated that the Court only needed to find that Mr Leslie had been an employee.

[231] See for example FSOC at [1.8], [5.2], [40], [41], [45], [46] and [53.1].

[232] Hodgson v Amcor Ltd [2012] VSC 94 (Amcor) at [1313].

[233] [1989] VicRp 72; [1989] VR 821 (Bracht).

[234] The codification of Ormiston J’s principles were also referred to in Australian Securities and Investments Commission v King [2020] HCA 4 (ASIC v King) at 17-18.

[235] ASIC v King at 16 (per Kiefel CJ, Gageler and Keane JJ).

[236] See Bracht at pp 829-830.

[237] Bracht at p 830.

[238] [2007] FCA 963; (2007) 160 FCR 35 (ASIC v Citigroup (No 4)).

[239] [2010] NSWSC 233; (2010) 238 FLR 384.

[240] See ASIC v Citigroup (No 4) at [499] and Buzzle v Apple at [93] – [109].

[241] Noted in Amcor at [1309].

[242] Windbox Submissions 27 April 2019 at [89].

[243] Windbox Submissions 26 April 2019 at [91].

[244] Exhibit P3 at [8.1].

[245] Exhibit P3 at [8.2].

[246] Exhibit P3 at [8.3].

[247] Exhibit P3 at [8.4].

[248] Exhibit P3 at [8.5].

[249] Exhibit P3 at [8.6].

[250] Exhibit P3 at [8.7].

[251] Exhibit P3 at [8.8].

[252] Adopting the expression used by Vickery J in Amcor.

[253] Exhibit J2. See too [16] – [19] above.

[254] Transcript at p 593.3.

[255] Exhibit J2 at [11.1]; Exhibit J3 at [16.1].

[256] Exhibit J2 at [11.2]; Exhibit J3 at [16.2].

[257] Exhibit J2 at [11.3]; Exhibit J3 at [16.3].

[258] Exhibit J2 at [11.4]; Exhibit J3 at [16.4].

[259] Exhibit J2 at [11.5]; Exhibit J3 at [16.5].

[260] Exhibit J2 at [11.6]; Exhibit J3 at [16.6].

[261] Exhibit J2 at [11.7]; Exhibit J3 at [16.7].

[262] Exhibit J2 at [11.8]; Exhibit J3 at [16.8].

[263] Transcript at p 203.4; Exhibit J3 at [18] – [22].

[264] Exhibit J3 at [18] – [21].

[265] Affidavit of Mr Zebb Leslie affirmed 6 March 2019 (Exhibit J7).

[266] Exhibit J7 at [7].

[267] Exhibit J7 at [7].

[268] Transcript at p 212 – Mr Dodd (who was responsible for the financial side of things) never provided Leslie with a copy of Windbox’s accounts.

[269] Exhibit J7 at [8] – to which Dodd agreed with at Transcript at p 218.

[270] Exhibit J7 at [5] – [6].

[271] Exhibit J3 at [24].

[272] Exhibit J7 at [9].

[273] Exhibit J7 at [9].

[274] Exhibit J7 at [9.1]; Mr Dodd accepted this – Transcript at p 219.2.

[275] Exhibit J7 at [9.2].

[276] Transcript at p 219.3.

[277] Exhibit J7 at [9.3].

[278] Transcript at p 219.5.

[279] Exhibit J7 at [9.4].

[280] Exhibit J7 at [10].

[281] Exhibit J7 at [12].

[282] Exhibit J7 at [11].

[283] Exhibit J7 at [10].

[284] Exhibit J7 at [13].

[285] Transcript at pp 220.6-221.2.

[286] Exhibit J7 at [14] which Mr Dodd agreed with at Transcript at p 221.5.

[287] Transcript at pp 603-607. In summary, the exporters would put out sale prices and the agent would then call Mr Leslie notifying of the sale prices. Mr Leslie would then discuss the sale prices and proposed sales with Mr Vagg. If Mr Vagg did not agree to proposed sales, he would decline the sales.

[288] Transcript at pp 599.5 and 674.

[289] See Exhibit J7 at [15] accepted by Mr Dodd at Transcript at p 221.5.

[290] Exhibit J7 at [11], [15], [17] – [18].

[291] Exhibit J3 at [27].

[292] Exhibit J3 at [30].

[293] Transcript at p 566.3.

[294] Exhibit J3 at [27.7].

[295] Transcript at p 227.7.

[296] Windbox Submissions 26 April 2019 at [90].

[297] See Mr Leslie’s letters of 7 and 17 January and subsequent communications discussed earlier in these reasons.

[298] Exhibit J3 at [64].

[299] Exhibit J3 at [65] and Tab 59.

[300] Transcript at pp 244.8-245.5.

[301] Exhibit J3 at [85], Tab 71.

[302] Exhibit J7 at [20].

[303] Transcript at p 245.8.

[304] Exhibit J7 at [25] – Mr Dodd accepted this paragraph at Transcript at p 259.4.

[305] Exhibit J7 at [22]; Transcript at p 250.6.

[306] Exhibit J7 at Tab 52.

[307] Exhibit J7 at [23].

[308] Exhibit J7 at [22].

[309] Exhibit J7 at [21].

[310] Transcript at p 256.4.

[311] Exhibit J3 at Tab 67.

[312] See [106] – [107] above.

[313] Exhibit J3 at [78] and [81].

[314] Transcript at p 256.8.

[315] FSOC at [41].

[316] FSOC at [45].

[317] FSOC at [41].

[318] See [105] above.

[319] Windbox Submissions 26 April 2019 at [163] – [166].

[320] Exhibit J4 at [46]-48]; Exhibit.J5 at [12].

[321] Affidavit of Robert Thomas Cook dated 5 March 2019 (Exhibit J8) at [3].

[322] JACT Submissions 27 May 2019 at [23].

[323] I discuss the “Vagg conspiracy” elsewhere in these reasons. See [307] - [311].

[324] See [49] – [55] above.

[325] Exhibit P20. See [53] above.

[326] Windbox Reply Submissions 10 June 2019 at [18.4].

[327] JACT Submissions 27 May 2019 at [24].

[328] JACT Submissions 27 May 2019 at [25].

[329] Exhibit C1 at p 91; and see the licences granted here.

[330] He clearly cannot assume he would be, or would want to be, employed by a purchaser. The specification of 5 years is otiose unless it represents a maximum.

[331] The correspondence passing between Mr Spazzapan and Mr Leslie following Mr Spazzapan’s file note is at ‘MS-3’ to Mr Spazzapan’s affidavit sworn 20 March 2019.

[332] Windbox Reply Submissions 10 June 2019 at [18.4].

[333] Windbox Reply Submissions 10 June 2019 at [18.5].

[334] Production of that file note was resisted on the grounds of legal professional privilege, but that claim was dismissed on the basis that Mr Leslie had waived the privilege.

[335] Affidavit of Markus Spazzapan affirmed 20 March 2019.

[336] Transcript at pp 684–700.

[337] Exhibit J9 at [5].

[338] Exhibit J9 at [3].

[339] Exhibit J9 at [6.2].

[340] Transcript at p 688.9.

[341] Transcript at p 687.5.

[342] Exhibit J9 at [7].

[343] Exhibit J9 at [8].

[344] Exhibit J9 at [9].

[345] Transcript at p 689.3.

[346] Transcript at p 689.7.

[347] Transcript at p 690.7.

[348] Transcript at p 692.7.

[349] Transcript at p 693.2.

[350] Transcript at p 693.10.

[351] Transcript at p 694.9.

[352] Transcript at p 695.4.

[353] Exhibit J9 at [11].

[354] Exhibit J9 at [12].

[355] See for example Mr Vagg’s emails of 1 November and 11 December 2017 quoted in [44] and [47] above.

[356] Cf Transcript at p 201.4.

[357] Exhibit J3 at [48].

[358] He had agreed it was a radical change in his position.

[359] Ms Wilkie was still under the impression that Windbox was still requiring the addition of the Vagg amendment.

[360] See [68] and [69] above.

[361] Transcript at pp 631-633.

[362] Transcript at p 637.2.

[363] Exhibit P11 at p 101.

[364] Exhibit P5 at [37].

[365] Mr Dodd repeated his query about Mr Leslie’s honesty in his further email to Mr Vagg on 1 February. Mr Vagg sent that email on to Mr Leslie at 8.42 pm that day. See Exhibit J3 at p 258.

[366] See [95] – [96] above.

[367] See [105] above.

[368] FSOC at [45.1].

[369] Exhibit P1 at [19] etc.

[370] Transcript at p 216.

[371] Exhibit J3 at pp 66-67; Transcript at p 228.

[372] Transcript at p 236.7.

[373] Exhibit J2 at p.8; see Transcript at p 236 where Mr Dodd agreed.

[374] Exhibit P11 at p 102; Transcript at p 228.

[375] Transcript at pp 359-360.

[376] Affidavit of Kimberly Ann McIntosh affirmed 25 February 2019 (Exhibit C2) at [9], Transcript at p 362.

[377] Transcript at pp 365.8-366.2.

[378] Transcript at p 363.4.

[379] Exhibit .J2 at pp 2-4; see also Exhibit J2 at p 5.

[380] Exhibit J2 at pp 15-16; Transcript at pp 232-234.

[381] Transcript at p 235.

[382] See [65] and [87] above.

[383] Transcript at p 245.

[384] Exhibit P4 at pp 37–51.

[385] Exhibit P4 at pp 40–45.

[386] Exhibit P4 at pp 46–50.

[387] Exhibit P4 at p 51.

[388] Transcript at p 134.7.

[389] Exhibit P4 at [4].

[390] Mr Newsome’s report concluded that such an assertion is not well supported.

[391] Exhibit J3 at [128] – [138].

[392] Transcript at p 251.

[393] Transcript at pp 215.5 and 216.5.

[394] Exhibit J3 at [148].

[395] Exhibit J3 at [151] – [154].

[396] Exhibit J7 at [29] and Transcript at pp 663-664 – Mr Leslie explained that the same practice takes place for Heytesbury. This is because the cattle are exported by ship and live exporters will not accept cattle with a lump on their neck.

[397] Transcript at p 530.

[398] Transcript at p 531.

[399] Exhibit J3 at [139] – [142], [159.5] – [159.8]; Exhibit J7 at [32] – [35].

[400] Exhibit P1 at [19].

[401] Exhibit P1 at [23].

[402] Exhibit J3 at [118].

[403] Report of Thomas Newsome dated 7 February 2019 (Exhibit P17A) at [5.3].

[404] Exhibit J3 at [114] – [120] and [128] – [138].

[405] Exhibit J3 at [173].

[406] Exhibit J3 at [175] – [177] and [182].

[407] Exhibit J3 at [179] and [182].

[408] Exhibit J3 at [102].

[409] Exhibit J3 at [103] – [112].

[410] Exhibit J3 at [109].

[411] See [205] and [209] – [213] above.

[412] See Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] AC 535 at 565; Emeco International Pty Ltd v O’Shea [No 2] [2012] WASC 348; ASPL Pty Ltd v Rajakaruna [2019] WASC 269 at [74] – [76] and discussions below concerning s 183(1).

[413] [2012] FCA 634; (2012) 213 FCR 1 (Links Golf)

[414] Ibid [700].

[415] [2007] NSWCA 172 (2007); 73 IPR 326 (Del Casale).

[416] [2009] NSWSC 987 (Manildra Laboratories).

[417] Manildra Laboratories at [1336].

[418] Manildra Laboratories at [77] citing Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272.

[419] Manildra Laboratories at [77] referring to Del Casale.

[420] See [347] – [350] above.

[421] Transcript at p 250.8.

[422] See above at [208] – [211].

[423] There could have been no certainty that Windbox would have been granted the grazing licenses in the circumstances of Mr Leslie no longer being the Station Manager. Accordingly, the only “detriment” was the loss of a chance.

[424] JACT Further Submissions 6 September 2019 at [14] – [15].

[425] FSOC at [46].

[426] See above at [202].

[427] Windbox Submissions 26 April 2019 at [95.17].

[428] See Windbox Submissions 26 April 2019 at [95.16] and [95.18].

[429] See Windbox Submissions 26 April 2019 at [94] and [102].

[430] Windbox Submissions 26 April 2019 at [104].

[431] [2018] FCA 2069.

[432] Windbox Submissions 26 April 2019 at [95.16] and [95.18].

[433] [2014] FCA 966 (Aladesaye) at [83].

[434] [2008] FCA 1601 (Wilson Parking).

[435] [2018] VSC 286 (Advanced Fuels).

[436] See [397] below.

[437] Advanced Fuels at [136].

[438] [2005] VSC 318.

[439] See [21].

[440] Del Casale per Hodgson JA at [58], [62], [70], McColl and Campbell JA agreeing.

[441] Campbell JA added additional reasons to those given by Hodgson JA for reaching that conclusion, and McColl JA agreed with both of their Honours’ reasons for disposing of the appeal.

[442] See [30] – [50].

[443] (1968) 1A IPR 587 at 590; [1969] RPC 41 at 47.

[444] [1987] FCA 266; (1987) 14 FCR 434 at 443.

[445] [1989] FCA 384; (1990) 22 FCR 73 at 86-7.

[446] Quoting Lord Greene MR in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 201 at 215.

[447] Del Casale at [50].

[448] See [379] and [380] above.

[449] Windbox Submissions 26 April 2019 at [155.1] – [155.5].

[450] See my discussion at [300].

[451] Ms Wilkie’s evidence at Transcript at p 282.2.

[452] See Transcript at pp 280-282.

[453] Exhibit J3 at pp 49 and 209.

[454] Exhibit J3 at pp 46 and 199.

[455] Exhibit C1 at [48] and p 94.

[456] Exhibit C1 at p 96.

[457] Exhibit J3 at pp 51 and 214.

[458] Exhibit P11 at p 101.

[459] Windbox Reply Submissions 10 June 2019 at [24.2].

[460] Cf Windbox Submissions 26 April 2019 at [155.6] quoted in [406] above.

[461] JACT Further Submissions 6 September 2019.

[462] Windbox Response Submissions 27 September 2019.

[463] Ibid at [3.2].

[464] There were three references to “Windbox’s imminent signing of the Grazing Licences”, at pp 9, 21 and 25, and a reference to “Windbox’s planned execution of the Grazing Licences” at p 7, of the Windbox Further Submissions in Reply.

[465] JACT Further Submissions 6 September 2019 at [21].

[466] Windbox Response Submissions 27 September 2019 at p 18.1. Counsel repeated this contention at p 25.9.

[467] If Mr Leslie could have made his application after disclosing his intention to Windbox without breaching s 183, there is no reason why Windbox could assume that the traditional owners would consider and determine Windbox’s application in Windbox’s favour, particularly if they were aware of a competing application from Mr Leslie. Indeed, one would expect them to act as they ultimately did, and consider both applications at the same time.

[468] See [393](d) and Item 12 on the list set out in [397] above.

[469] See [393](d) and Item 12 on the list set out in [397] above.

[470] Cf Del Casale per Campbell JA at [150].

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